March 31, 2005

What's Good for WalMart is Good for America?

ALP correspondent Dave Meleney sends in a link to a debate about Wal-Mart entitled What's Good for WalMart is Good for America? on April 6, 2005 in Manhattan . It features top speakers:

A battle of ideas between two of the world's most respected weekly magazines.

Co-sponsored by The Economist, The Nation and the New York Society for Ethical Culture.


Ben Edwards, US Business Editor, The Economist

Steve Malanga, Contributing Editor, City Journal and a Senior Fellow at the Manhattan Institute

Liza Featherstone, Contributing Editor, The Nation

Jonathan Tasini, President, Economic Future Group

Moderated by

WNYC's Brian Lehrer, of The Brian Lehrer Show

I cannot attend -- I'm in DC and cannot travel to NY on that day -- but maybe some of you can, and will send in notes or reviews.

Posted by Kevin at 8:19 PM

Wal-Mart's Prices are Different in Each Store

Some people found this out the hard way:

A mistake? Nope: Wal-Mart calls it "competitive pricing."

A Wal-Mart spokeswoman in bentonville arkansas told us:

--"We set suggested prices for each item. But store managers are allowed to lower them further to remain competitive with nearby stores."

That may mean a Wal-Mart close to a Target store may have better deals than a stand-alone Wal-Mart.

And if it's close to Target, Meijer, and Biggs, you may have hit the jackpot.

For loyal Wal-Mart shopper Lesley Parrett, it was all "a big surprise, a huge surprise!"

My advice? If you have a choice, look for discount stores that are clustered together: For instance a Wal-Mart, Kmart, and Target all within a block or two.

With so much competition, you may get lower prices, so you don't waste your money.

I'm John Matarese.

Thankfully, his solution was not to complain bitterly.

[H/T: EastSouthWestNorth]

Posted by Kevin at 3:28 PM

Dealing with a New Supercenter

A new supercenter will be hard on many existing retailers, but will be even harder on all existing politicians. So writes Kenneth Stone in PM Magazine:

So why is there so much controversy about Wal-Mart? This question could be answered in several ways. First, nearly everyone likes a winner. Wal-Mart's financial success has definitely shown the retailer to be a winner. Sometimes, however, winners can be bullies. And some people view Wal-Mart's power as a bit, or a lot, too much....
He summarizes his own research (linked to on the left sidebar), frames the questions facing local officials, and offers eight solid tips to local officials on how to deal with a new big box...

[H/T: EastSouthWestNorth]

Posted by Kevin at 3:23 PM

More on Tom Coughlin (and an Introduction)

Coughlin's attorney commenting in this morning's Arkansas Democrat Gazette:

An attorney representing former Wal-Mart Vice Chairman Thomas Coughlin denied allegations that his client misspent as much as $500,000 in company money. "He�s not guilty of any wrongdoing," William Taylor, a Washington D. C.-based attorney who specializes in white-collar crime and litigation, said late Tuesday.

According to what I've heard from former co-workers at the home office, this is probably correct as a legal matter, but apparently there was some knowledge of what was happening that wasn't addressed.

The other "unnamed officer" that was either asked to resign or fired (depending on who you talk to) was Rob Hey. Hey was a long time director in the operations department on the Wal-Mart Stores side and was later promoted to VP. He was also a Coughlin prot�g�.

Yeah, my name has been sitting on the sidebar over there for a long time and yes, this is my first post. Thanks to Kevin for the opportunity and the patience.

I was a manager at the home office for five years prior to heading for the greener (REALLY greener) pastures of Vendorland. Obviously, my name isn't Angus, but I still do a lot of work with WM, and I would like to continue. I'm happy though, to be able to use this forum to share the reactions I see here in Bentonville to the various stories about the company.

Posted by Angus at 9:49 AM

WM Vs. Target Price Comparisons

Via Eighty-Twenty, we find a monster article on the prices of the two discounters on Comparing 20 items, Wal-Mart came out ahead $4.89, for a savings of about 4% over Target:

It was fun to compare prices in Target and Walmart. Obviously a 20-item test isn't a particularly thorough price-comparison, but I'm satisfied that these results will help to illuminate the difference in these two discount retail chains.

I really tried to be as impartial as possible, but with statistics, it is almost impossible to describe a situation without a bias.

The obvious next comparison is the newly-merged K-Smears, but I think I'll check how Amazon stacks up first.

Thank you.

I'm glad there are people out there crazier than I am.

Posted by Kevin at 9:37 AM

NetFlix 1, Wal-Mart 0

Dollarwise has a personal comparison:

Similarly, Netflix was clearly the winner in offering DVDs by mail. When Netflix was started it patented its services so that no one could offer the same service immediately. But once the patent expired, Wal-Mart started a similar service. Trust me, I tried both Wal-mart and Netflix but Netflix was far better than Wal-Mart. First of all, the user interface of Netflix is million times better than Wal-Mart online rental store. Second of all, DVDs were slower to arrive from Wal-Mart whereas Netflix was immediate. So the key thing for Netflix is to retain its customers and add more customers.

Posted by Kevin at 9:32 AM

March 30, 2005

Wal-Mart Credit Reports

WM really does sell almost everything for less.

For instance, 3-in-1 credit reports for $26.88, or $7.36 for a single TransUnion report. That's compared to $29.95 and $9.50 if you go to without going to Wal-Mart's website first.

Posted by Kevin at 2:27 PM

Interpreting Liza Featherstone: WM Not Guilty of Widespread Discrimination?

Check out this interview with the infamous Liza Featherstone:

STAY FREE!: I was amazed that some of these women--who had been through hell with Wal-Mart and had incredibly solid cases--would opt for a class-action suit, because they'd get a lot more money out of a private lawsuit. Also, they wouldn't have to worry about the case dragging on for years.

FEATHERSTONE: Yes, actually, in their cases, they have the resources to pursue individual suits, but they really want to change Wal-Mart. If they were to sue as individuals, Wal-Mart would settle and it would never have to make any institutional reforms. The only reason these women are doing the class action--aside from the strength in numbers--is because they want to change the company.

STAY FREE!: But if a bunch of women sued Wal-Mart individually, wouldn't Wal-Mart see that they're losing money and see that discrimination is ultimately against their interest?

FEATHERSTONE: No, there would be so few cases that it wouldn't matter. A million dollars every few years is nothing to Wal-Mart.

STAY FREE!: How successful are class-action suits in changing companies? If the workers win, what then?

FEATHERSTONE: With a class-action suit, you can order a company to pay back wages to the people it wronged. You can order it to change its promotion system, to provide better incentives for promoting minorities, to post its jobs, and you can have some degree of enforcement. That's the ideal scenario. Those reforms are so much better than nothing, but they're ultimately kind of limited because they don't really change the balance of power between the worker and the employer very much. What you can accomplish with a class-action suit is nothing next to what you can accomplish if the workers organize. [Emphasis added]

Although Ms. Featherstone meant to imply that the economic damage of losing individual discrimination suits would not be devastating to Wal-Mart -- especially compared to the impact of a class action loss or unionization -- her assumptions undermine the morality and justifiability of the class action.

It is Ms. Featherstone's explicit estimation that the women (like Betty Dukes) who have plausible discrimation complaints agains Wal-Mart have the resources to sue individually. However, they chose to sue as a class because Wal-Mart has not discriminated against enough women to make a difference in the way the company operates if all the alleged victims actually won their cases.

This admission is startling, for several reasons. The most important being that it shows that the plaintiffs (and their legal team) probably have no good reason to believe that most of the women in the class were actual victims of discrimination by Wal-Mart. The plaintiffs have chosen to use over a million women as pawns in their lawsuit-cum-social-engineering experiment. They're nothing but a pile of bargaining chips...

Posted by Kevin at 12:18 PM

Will Wal-Mart Save Iraq?

GOP Vixen sets out her plan for a peaceful, democratic Iraq:

Step One: Welcome to your friendly neighborhood Baghdad Wal-Mart! Encourage democracy through discount shopping. Who would want to roll car bombs down the street when you're rolling back prices down at the supercenter...

As an added bonus, Saddam�s legendary information minister �Baghdad Bob� can be the country�s first Wal-Mart greeter, lying to store guests about which aisle harbors the Charmin.

Posted by Kevin at 11:28 AM

Wal-Mart and Mt. Monadnock

Hoarded Ordinaries has a marvelous post (and photo) contrasting Wal-Mart with Mt. Monadnock...

Keene, NH lies ringed with hills in the shadow of Mt. Monadnock, a clot of culture settled in a bowl of stone. Over time I've posted various pictures of Mt. Monadnock, and here's another. Isn't it ironic that one of the best views of Mt. Monadnock occurs at the junction of Key Road and Winchester Street, right across from Wal-Mart?
Go look and read if you're interested.

Posted by Kevin at 9:55 AM

March 29, 2005


Via The Eclectic Econoclast, the oddity of Mr. Fish

Is this supposed to be the brain of Andy Stern? :)

Posted by Kevin at 11:49 AM

Whole Foods, the Wal-Mart of the Health Food Retailers?

Rob over at BusinessPundit asks "Why is it that I don't think we will see people protesting to keep Whole Foods out of their cities?". They drive mom and pop shops out of business too:

Auerbach already has enough competition from Whole Foods and Wild Oats. The impact of their openings in the last two years, on his St. Matthews store in particular, has been "worse than our worst-case scenario," he said.

Posted by Bob at 3:45 AM

March 28, 2005

Tim Noah - Where's Your Evidence?

Via Freiheit und Wissen, founder of the Carnival of the Un-Capitalists, we find an absolutely infuriating article -- snarkily accusive, ill informed, and smug -- by Timothy Noah of Slate:

I'd thought it was a settled matter that Wal-Mart had achieved its miraculously low prices by squeezing its employees. Not so, said Scott
Settled by whom?

Just who has written a comprehensive, comparative analysis of the wages and benefits among all retail chains -- revealing that WM is the cheapest of them all? Who has demonstrated that Wal-Mart sqeezes its employees -- pays lower wages and benefits than the mom and pop stores it replaces? The UFCW? The AFL-CIO? Writers at The Nation and Alternet?

I had thought that Wal-Mart's low prices were demonstrated to be a result of a complex of factors: paying -- like everyone does -- low but competitive wages for low skilled work, large investment in information technology (which permits keeping far less inventory in its stores than competitors), opening stores in seemingly empty rural areas with only small retailers as competitors, low-cost design of facilities, cramming as much into a store as humanly possible, owning and operating its own distribution capacity, pushing suppliers to make goods cheaper, dumping suppliers who can't lower the cost of production, and a willingness (despite alleged public resistance) to import 3/4 of its goods from China -- not to mention a no-frills executive lifestyle (they fly coach and double up in standard rooms).

Mr. Noah, who did the hard work of eliminating all but "squeezing its employees" as relevant factors in the formation of Always Low Prices?

OK, well, about about those contested wage statistics?

Wal-Mart's average wage is around $10 an hour. [ - H. Lee Scott]

As Tom Geoghegan, a labor lawyer in Washington (and author of Which Side Are You On?: Trying To Be For Labor When It's Flat On Its Back) points out, the relevant number isn't the average, which would be skewed upward by the large salaries of relatively few highly-paid company executives�Scott, for example, receives, by one reckoning, 897 times the pay of the average Wal-Mart worker�but the median. In the Dec. 16 New York Review of Books, Simon Head, director of the Project on Technology and the Workplace at the Century Foundation, stated, "the average pay of a sales clerk [italics mine] at Wal-Mart was $8.50 an hour, or about $14,000 a year, $1,000 below the government's definition of the poverty level for a family of three." That the current minimum wage of $5.15 per hour leaves families even farther below the poverty line is a depressing topic for another day. [Emphasis added --ALP]

Note now that 2.9% of the hourly workforce earns the minimum wage (or less -- think waitresses), because this not so depressing data point will probably not be noted on that other day.

Anyway, I agree that the median is the relevant statistic -- if the distribution is heavily skewed. If it isn't, the mean and the median are close enough for all but nit-picking purposes. But Mr. Noah hasn't demonstrated that Wal-Mart's hourly wages of full time employees form a skewed distribution. I agree that if salaried employees wages were included, the distribution would probably be highly skewed, and the median would be a better choice. But salaried employees wages were NOT included; H. Lee Scott was talking about HOURLY wages of full time HOURLY employees.

Again, H. Lee Scott's own wages were not included in the near $10 an hour figure; neither were the wages of any other full-time salaried employee. Obsessing about the relative size of their pay to the hourly worker is unwarranted here.

(Let's play devil's advocate anyway. Assuming Mr. Scott worked 40 hours a week [he works more] for 52 weeks, his annual wages of $10million come to $4800 an hour; but if included as an hourly wage, it would bias upward the mean hourly wage of all 1.2 million U.S. employees by about $0.004 an hour. Adding in all other highly paid employees would have the same effect proportional to their salaries. Would the total mean bias sum to a dollar an hour? I'll figure it out later, but I repeat, THIS BIAS IS NOT PRESENT IN H. LEE SCOTT's figures).

Why doesn't Timothy Noah link to the Drogin report's hourly wage table? Perhaps because Wal-Mart's opponents don't use the median when discussing WM hourly wages, and perhaps because the data support H. Lee Scott's claims. It shows wages for all full time hourly WM employees in 2001. The average hourly wage was $9.26 -- in 2001 -- according to the expert used by the lawyers of the plaintiffs suing WM for sex discrimination.

Wal-Mart claims that full time hourly associates are paid $9.68 an hour (circa 2004). This makes sense, since a ($9.68-$9.26)/$9.26=4.5% increase is not unreasonable over a time period of a few years.

Also, Mr. Head rightfully claims that the average wage for a SALES CLERK is about $8.50 an hour, but of course, a sales clerk is the lowest paying full-time job at WM; why would neither he nor Tim Noah not mention this???

And Simon Head's extrapolation from hourly wages to annual salaries is incorrect. In fact, there is no need to extrapolate; actual data -- data that compensate for actual weekly hours worked (see below)-- are available. Anyway, in $2001, according to Wal-Mart opponents, sales clerks made an average of $15,500 -- not $14,000. This is absolutely dishonest on Mr. Head's part; the salary is actually $500 ABOVE the poverty threshold for a family of three. Nice try, play again.

What's next. Oh, yes, work-week:

Few people realize that about 74 percent of Wal-Mart hourly store associates work full-time, compared to 20 to 40 percent at comparable retailers.

Yes, but what exactly is a "full-time worker"? Typically, full-time is defined as 40 hours a week or more. At Wal-Mart, it's defined as 34 hours a week. So of course Wal-Mart has more "full-time" workers.

We all agree that 40 hours is a solid full-time job, and that 34 is not. Since Mr. Noah is so convinced this is a large problem, perhaps he would care to tell us how large a share of all hourly WM associates work 34 hours a week? Does he even know, or is he using the 34 hour figure in an entirely inappropriate context? (The 34 hour FT workweek is generally designed so that those working fewer hours qualify for full-time benefits). But don't take my word for the benefits problem; listen to the AFL-CIO:
In 2002, Wal-Mart raised its definition of �full-time� work from 29 to 34 hours weekly. With that change, Wal-Mart increased the number of its part-time workers to nearly 400,000, or about a third of its total workforce, and also increased barriers to workers� eligibility for job-based health care, according to a report by the minority staff of the U.S. House of Representatives Education and Workforce Committee.
In other words, the AFL-CIO used the disgusting George Miller attack paper to defend its claim that many Wal-Mart employees became part time because they worked between 29 and 34 hours... But footnote 19 of the Miller report says only that a large increase was "likely", and provides no evidence that Wal-Mart employs quasi-full-time employees. Hence, I am suggesting that there is absolutely no evidence of a large number of "full-time" Wal-Mart employees who work around 34 hours a week. Without citing any empirical evidence -- even anecdotal, or the records of a single store, or even a portion of a store (like a Tire & Lube) -- this claim is utterly worthless; repeating it is nothing but hot air. If anyone does have evidence of intentionally short work weeks, then they should show it.


Fewer hours worked, I need hardly point out, means that Wal-Mart's "full-time" employees are less likely than employees elsewhere to be able to afford premiums for any health insurance they're offered. According to Head, fewer than half of Wal-Mart's employees can afford even the company's least-expensive health plan.
Hmmm... Simon Head has no evidence of affordability, so he can't make this claim with a straight face. Wal-Mart notes:
Currently, 86 percent of Wal-Mart hourly store associates surveyed have medical insurance - 56 percent of those with coverage received health care insurance from Wal-Mart and the remainder receive health care through another source such as another employer, a family member, the military or Medicare.
Let's posit that the 14% without insurance "can't afford it", which we know is wrong, but charitable to Mr. Head's position. Mr. Head has no evidence that the 38% with non-WM coverage cannot afford the Wal-Mart plan; he has evidence that non-WM coverage is often more desirable for associates than WM's coverage, but less desirable is not the same thing as unaffordable. We can't add the 38% and the 14% because we do not know the financial situation of the 38%.

Back to Tim Noah:

In 2003, the most recent year for which I can find data, Scott sucked down $29 million (including stock-option grants). That same year, G.R. Wagoner, president and CEO of General Motors, hauled in about half that amount, $15 million. Following Scott's logic, I don't see how he can avoid knocking his own pay down to around $10 million.
H. Lee Scott does not set his own pay, so how is he supposed to knock down his own pay? (If I'm wrong, then provide evidence that Scott sets his own pay). If Tim Noah thinks that Scott is overpaid, why doesn't he contact everybody on the Wal-Mart board and tell them that they're wasting millions of dollars? He could start off like this, "Hi, I'm Tim Noah, columnist for Slate, and I know better than you how much your employees should be paid."

I'd like to hear their responses.

Posted by Kevin at 1:49 PM

March 27, 2005

Another Wal-Mart Blog

Here's another Wal-Mart blog, Behind the Counter written by "BBCAmerican", a customer service representative at a WM Store in Florida. The subtitle is "Tales from the Customer Service Desk Working Wal-Mart Days, Living Wal-Mart Nights." The blog isn't new -- like ALP it started in April 2004 -- but BBCAmerican only starting working there in September (read the post Wal-Mart Hates Unions for fun and profit).

Also note that the writer fears Bush/Cheney above all...

The March 16th entry has a scoop:

Here's another nugget. Wal-Mart kicked vendors out of in-store vending machines this week. ABSOLUTELY ZERO outside vendors allowed in. Only Wal-Mart products. So now, we can't get Coke, Pepsi or Dr. Pepper, or even Aquafina or anything like that -- only Wal-Mart of Sam's brand soda and juice. It was supposedly a "security decision" made at the corporate level. They said they were worried about having vendors wandering around the store and allegedly "overcharging" for sodas and stuff. HMMPFPHF! It was a straight up "profit decision."

Posted by Kevin at 7:11 AM

March 25, 2005

Thomas Coughlin Fired (UPDATED)

This adds a new dimension to our previous report on the executives being fired:

Wal-Mart Stores Inc. said on Friday it had asked former Vice Chairman Thomas Coughlin to resign as a director in connection with an internal investigation into unauthorized use of corporate-owned gift cards and personal reimbursements.

Coughlin, who sat on three board committees, including the one for strategic planning and finance, resigned from the board on Friday in a disagreement with the company over the matter, Wal-Mart said in a filing with the Securities and Exchange Commission (news - web sites).

Wal-Mart said it had reported the matter to the U.S. Attorney for the Western District of Arkansas based on the findings of the investigation, including Coughlin's response to questions about his knowledge of certain transactions.

UPDATE: Matt at Overtaken by Events has a better summary:
I'm not sure that the significance of this can be overstated. Tom Coughlin, probably more than any other leader in the company, WAS Wal-Mart. He was a personality, and the regular employees loved him. I met him several times and heard him speak at various meetings and the guy was absolutely dynamic.

UPDATE 2: Mr. Coughlin had previously agreed to join the board of Alien Technology (pr):

Coughlin, former vice chairman, Wal-Mart Stores, is widely recognized as a pioneer in leading the adoption of advanced information technologies, including RFID, to transform business processes and operational efficiency in retail. After 28 years with Wal-Mart, he retired from his executive management role with the company in January 2005.

"We are extremely pleased that Tom has joined our board," said Tom Baruch, chairman of the board, Alien Technology, and managing partner and founder of CMEA Ventures. "His vast industry experience and vision for the adoption of RFID in the retail industry will be valuable for Alien as the company continues to pioneer development and implementation of RFID."

Perhaps the others on the board are rethinking this... The press release (same document as above, different link) provides an accurate summary of Mr. Coughlin's WM duties and elsewhere:
As Vice Chairman of the Board of Directors of Wal-Mart Stores, Inc, Coughlin was responsible for the U.S. operations of Wal-Mart Discount Stores, Supercenters, Neighborhood Markets, and SAM�S CLUBS, as well as Prior to this position, he served as Executive Vice President and President and Chief Executive Officer of the Wal-Mart Stores Division and SAM�S CLUB (USA). Since joining Wal-Mart Stores in 1978, he served as Vice President of Loss Prevention, Vice President of Human Resources, Executive Vice President SAM�S Club Operations, Executive Vice President of Specialty Groups, and Executive Vice President and Chief Operating Officer of Wal-Mart Store Operations. In the fall of 2001, he was elected to the Wal-Mart Board of Directors.

Mr. Coughlin is affiliated with numerous boards and organizations including Wal-Mart Stores, California State Hayward Educational Foundation, ChoicePoint, Inc., Cleveland Clinic Foundation Board of Trustees, MD Anderson Advance Team, National Association of Chain Drug Stores, Northwest Arkansas Community College Foundation, St. Edwards High School, and Students in Free Enterprise. He was recently honored by the Bentonville Library Foundation with the announcement that he and his wife Cynthia will be the namesakes for the new �Coughlin Library� in Bentonville, Arkansas, a new facility under development as a result of a $4 million gift from the Walton Foundation. Coughlin received his Bachelor of Science degree in Political Science from California State University.

UPDATE 3: Wal-Mart's press release has been fully reported by Reuters.

UPDATE 4: The Left Coaster's December article on Coughlin is absolutely punishing:

Coughlin, 55, was treated a year ago for arterial blockage, but company officials did not attribute his departure to his health. They say he returned to work fully recovered and kept a hectic travel schedule.

"He had an incredible sense of urgency. He taught people that the center of the company is in stores, not at headquarters, because there are no cash registers ringing at headquarters," says Jay Allen, head of executive affairs at Wal-Mart.

And that in a nutshell defines Thomas Coughlin and the minions he's created. Some of these men will decide that there are greener pasture elsewhere (for them!), and others will continue to rise in Wal-Mart's ranks. But none of these men will leave behind what Coughlin taught them about running a retail business. As these men make their career moves, the Wal-Mart philosophy about so many things will travel with them, and as their successes happen, other executives will want to model themselves after these men in the hops of matching their achievements.

UPDATE 5: The Arkansas Democrat Gazette has more:

Coughlin announced his retirement just days before Wal-Mart fired seven executives in December. The company said the executives were terminated for breaking company rules, though it never elaborated beyond that.

Coughlin supervised two of the most senior executives who were fired: former executive vice president Jim Haworth and former senior vice president Terry Pharr.

Haworth and Pharr both discussed their relationship with Coughlin when they gave depositions to attorneys suing Wal-Mart over alleged sexual discrimination at the company. Haworth was deposed in 2003 and Pharr in 2002.

Both men said Coughlin interviewed them before they were promoted to their respective positions. Haworth said that Coughlin gave him his annual performance review.

In his letter to employees Friday, Scott said he could not tell them if December�s firings were related to Wal-Mart�s investigation of Coughlin because of the federal criminal investigation.

Wal-Mart said in its filing that the expenditures under investigation involved "corporate-owned gift cards" along with "third party invoices and Company expense reports."

Posted by Kevin at 8:43 PM

K-Mart & Sears to Die Slowly & Painfully?

Businesspundit notes that Wal-Mart will not immediately see a smaller Sears/K-Mart footprint:

To be successful, Kmart and Sears need to find (or establish) a niche and fill it. I don't see them beating WalMart at low prices. I don't think they can beat Target at cheap chic, and they are too big to mess with a small retailing niche.
He foresees a corporate death... and the commenters are not to positive...

Posted by Kevin at 4:18 PM

AFL-CIO To Hold Counter Media-Event

Mark your calendars; on April 5 and 6, you can attend the pro-WM media circus, or the anti-WM media circus:

While details about the events were not immediately available, a person familiar with the matter said that the AFL-CIO "started talks" this week about possible actions its members could take at the conference, set for April 5-6 in Bentonville, Ark., or other cities.

Additionally, other North American labor unions are pondering ways to make their presence felt as they seek to draw the attention of the gathered media to their grievances against Wal-Mart (Research).

Wal-Mart, whose 1.5 million employees make it the nation's largest private-sector non-union employer, has been hit by for dozens of lawsuits against it alleging wage-and-hour violations and gender discrimination. It announced an overhaul of its pay and promotion policies last summer.

OK, first WM has ~1.2million employees in the US and over 1.5 worldwide. It is still the nations largest private-sector emploer. Second, I will NOT be covering these events in person, as much fun as Bentonville is supposed to be, as I have far more important things to do!

Posted by Kevin at 1:23 PM


Here are two Wal-Mart cartoons from the WM Sucks forum:1 and 2

Posted by Kevin at 12:04 PM

Right and Left Talk Past One Another

Jay Nordlinger is Wal-Marted-out:

The activists, of course, had no need of Wal-Mart: They didn't need jobs, and they didn't need goods at Wal-Mart prices. They have the fortune to work and shop elsewhere. Wal-Mart is a godsend to the poor and the lower middle class. They generally don't get a say in whether a Wal-Mart goes up. The activists would greatly prefer a vacant lot � with weeds growing between the cracks � to a Wal-Mart, which they deem an unmatchable offense.
Perhaps intentionally ignoring the most cogent part of Nordlinger's piece, Sneaky Rabbit gets in some really good hits:
It seems Nordlinger's well-meaning attempts at a mutually elevating dialogue have sustained one too many blows from the emotionally charged fictions that fuel such things as Wal-Mart protests and university conferences.

Yet, though discouraged, he comes out of the battle with the liberal elite with the truth at his side, still secure in the knowledge that "Wal-Mart is a godsend to the poor and the lower middle class." While we might think at first that he means lower middle class and poor Americans, who don't happen to work in manufacturing, want to join unions, or make a living wage, Nordlinger anticipates our misreading and misinformation. Yet, rather than succumbing to the temptation to mock the ignorant liberal reader, Nordlinger serenely turns away from the technique of making straw men out of the opposition and delivers us the cold hard facts, setting us straight about the Wal-Mart issue

Jawbones is good at picking quotes, and in my opinion wins this rhetorical battle hands down.

Posted by Kevin at 11:22 AM

�3 jeans war

The Evening Times gives us the skinny on the Asda-Tesco jeans war:

TWO top supermarket chains today slashed the price of jeans to just �3 - the price of a pint of lager and a packet of crisps - in a vicious price war.

Asda reduced the price of its jeans which were already selling for �4 by a further �1....

In response, Tesco - which also sold jeans for �4 - announced it would match Asda's price....

Five years ago, Asda's least expensive jeans cost �16. Since then they have gradually slipped lower. Last year they fell from �6 to �5 to �4.

Posted by Kevin at 9:34 AM

Tumwater and Yelm

The Olympian reports about anti-Supercenter activism in the Olympia, Washington region:

Residents fighting proposed Wal-Mart supercenters in Tumwater and Yelm have organized two public meetings next week.

Representatives of two opposition groups say they will ask for donations to hire lawyers to stop both stores.

The nation's largest retailer has proposed a 207,000-square-foot store at Littlerock Road. It also has proposed a 187,400-square-foot supercenter at state Route 507 and Grove Road in Yelm....

A Seattle spokesman for the company said Wal-Mart wants to build more South Sound stores to be more convenient for customers....

The Tumwater meeting Tuesday at Black Hills High School is a "coming out" for a group known as Tumwater Liveable Community, said Patrick Long, a member of the group.

Posted by Kevin at 9:31 AM

March 24, 2005

Stanwood, Washington

The debate surrounding the proposed Stanwood, WA store seems rather cordial:

STANWOOD - Economic catalyst or economic disaster? Stanwood merchants could expect a bit of both, based on a presentation Tuesday night by the consultant who crunched the numbers to show what would happen if Wal-Mart came to town....

Chase was invited to present an economic impact study about large retailers and answer questions at a joint workshop of the Stanwood City Council and Stanwood Planning Commission at Cedarhome Elementary School.

About 90 residents, a few with homemade anti-Wal-Mart signs, sat quietly while city officials asked Chase about the report. No public comment was taken; an official public hearing is planned in April.

The issue has been stirring since last fall, when an Arlington developer mentioned in a letter to the city that Wal-Mart might be interested in 23 acres at the northeast corner of 72nd Avenue NW and Highway 532. The land would first need to be rezoned from residential to commercial.

Also, somebody started a blog about Walmart in Stanwood, but never followed up after one post that received four interesting comments.

Posted by Kevin at 10:34 AM

March 23, 2005

Markets in Everything: Wal-Mart Litigation Edition

Plan on suing Wal-Mart? Don't do all that background research yourself! Contact the Wal-Mart Litigation Project for all your prepackaged taxonomy needs:

The information compiled by the Wal-Mart Litigation Project is organized by type of case into a taxonomy, or set of categories. Each category includes all the material we have on file concerning that particular type of suit (e.g., slip and fall involving coat hangers on the floor). The information packets offered for sale by the Project contain summaries of the following types of materials:

* Verdicts and Settlements Against Wal-Mart

* Opinions and Appellate Rulings

* Complaints / Petitions

* Miscellaneous Documents

* Defense Verdicts

The prices -- from $30 for Assault Upon Customer by Customer (2 items, $30) to Merchandise - Merchandise Being Moved or Shoved by Employees (38 items, $200) seem reasonable to me.
The Wal-Mart Litigation Project has identified over one hundred different types of known lawsuits against Wal-Mart.
In truth, the website seems a few years behind the times, but I gather that the earlier material is the most difficult to research anyway.

(The Markets in Everything title was swiped from Marginal Revolution).

Posted by Kevin at 4:18 PM

More Opposition in Mexico?

Without citing any evidence, Reuters tells us that opposition to Wal-Mart is increasing in Mexico.

The fight against the discounter is inspired by successful challenges on Main Street, USA. In Mexico, though, resistance is spiced with national pride and no small dose of bitterness left from foreign conquest centuries ago.

"They fool us like the Spaniards did," said Patzcuaro printer Marco Antonio Garces. "They don't come on horseback, but they dazzle us with automatic doors and air conditioning. They'll trade Chinese junk for what little we have."

To Guadalupe Loaeza, a newspaper commentator and self-confessed Wal-Mart shopper, such talk sounds misplaced in a country where citizens toss garbage into the street and pay little mind to preservation.

The rhetoric really reflects Mexico's love-hate relationship with its powerful northern neighbor, Loaeza said.

"More and more, we import lifestyles resembling the American way of life," she said. "We feel seduced, and at the same time threatened."

In the past decade, Wal-Mart de Mexico, or Walmex , has become the nation's No. 1 retailer and largest private employer. It now has almost 700 stores and restaurants, using aggressive expansion and low prices to take business from established supermarkets.

"It's the convenience," said Leticia Aguirre, who welcomes Wal-Mart. The Patzcuaro mother of two chalks up opposition to sheer self-interest on the part of local merchants. "They're afraid the competition will be strong," she said.

As Wal-Mart enters tougher markets, the organization of its opposition is increasing, and the voice of those opposing is louder, but perhaps sentiment across the Mexican population has not changed at all. But isn't widespread sentiment what is generally thought of as opposition to Wal-Mart?

Posted by Kevin at 11:55 AM

South Korea Gov't Goes After Big Retail

JoongAng Daily reports:

E-Mart was fined 220 million won; HomePlus, 120 million won, and Carrefour, 99 million won. Lotte Mart and Wal-Mart received orders to correct their dealings with their subcontractors.

According to the antitrust agency, E-Mart, HomePlus and Wal-Mart returned goods worth 1.8 billion won to their subcontractors without a reasonable explanation.

It also said Carrefour and HomePlus took advantage of ambiguity in their arrangements with their subcontractors to force them to do whatever they wanted, such as set up displays.

Separately, the agency also said E-Mart and Lotte Mart was guilty of false advertising.

WM looks pretty clean compared to its competition...

Posted by Kevin at 11:47 AM

Candanian Unions Call Wal-Mart a Human Rights Abuser

It is sometimes a reporter's job to just rehash what is fed to them by their subjects. When reporting about unions, a reporter will no doubt hear that unions think it a fundamental human right for workers to join a union:

"When Wal-Mart denies Canadian workers their right to join a union and bargain collectively, it is thumbing its nose at the Charter of Rights and Freedoms and the basic rights of all workers and families in Canada," said Michael Fraser, UFCW national director. "It's an outrage that Canadian governments are tolerating this routine denial of basic rights by Wal-Mart."

The unions will announce tomorrow a national labour movement campaign, as well as specific initiatives involving Wal-Mart.

Aren't reporters supposed to give a little thought about this fundamental right of association? The implentation of this right by the UFCW at Wal-Mart will mean a minority of Wal-Mart workers will have union dues and a worker contract involuntarily imposed on them, and not just by a majority of their co-workers, but by the legal representation of a national federation they do not wish to participate in. Just how is it a fundamental right to coerce a minority, allegedly for their own good?

Can't one also insist that when Wal-Mart refuses to run a union shop, it is utilizing its right to employ its capital where and with whom it sees fit? It is utilizing its right to "withhold services"...

Posted by Kevin at 11:42 AM

Ham Lake, Washtenaw, and Ogden

Here's a list of recent locations where WM has pulled back for reconsideration, or has faced serious heat:

Ham Lake:

Wal-Mart officials have shelved their plan to build a 200,000-square-foot store in Ham Lake.

The giant discount retailer withdrew a rezoning request last week, preempting a City Council vote Monday that was expected to derail the project.

Wal-Mart officials couldn't be reached for comment Tuesday, but Ham Lake officials said the retailer could come back with a revised, possibly smaller, proposal.

Washtenaw County, South of Ann Arbor, MI:

Some Washtenaw County residents held a "Wal-Mart Not Welcome" rally on Tuesday afternoon to protest the proposed opening of a store in the area. Wal-Mart

The rally is the second against the proposed 166,000-square-foot supercenter at the corner of State Street and Campus Parkway.

Organizers of the protest, which took place from 2 p.m. to 4 p.m., are part of a group of residents that fear the store would add traffic to the area, kill small businesses and snuff out the small-town charm of the community

The latter also offers a survey with rather narrow options:
Do you think a Wal-Mart store would be a welcome addition to your community?
Yes. It offers discount prices and a place to one-stop shop.

No. It would put small businesses out and ruin the small-town charm.

Hey! Can't it be yes and no? And small towns in Michigan have charm? Not that I saw... Anyway, the results are currently 172 no - 137 yes.

Wal-Mart defeated in Ogden, because eminent domain is no longer permitted:

Governor Huntsman signed a bill reducing the power of city re-development agencies. The Ogden RDA wanted to use eminent domain to bring a Wal-Mart to town. Now that's gone....

Littrell couldn't tell you how many times her group stood outside and protested, only that their message was clear. A city shouldn't be allowed to use eminent domain to get rid of a neighborhood, just to make room for a private business like Wal-Mart.

Dorothy Littrell: �Eminent domain had its purpose for the purposes of government.�

But in this case, she says this Wal-Mart isn't for government purpose.

To be seen as caring for the private property of community members, Wal-Mart should immediately renounce the use of eminent domain by governments it plans to do business with.

Posted by Kevin at 11:25 AM

March 22, 2005

The Teamsters are Coming!

While the UFCW is busy trying unsuccessfully to unionize Wal-Mart's stores, the International Brotherhood of Teamsters wants in its distribution centers. Via

Wal-Mart workers deserve the same representation: As the world�s most modern and efficient distribution and retail system, Wal-Mart should be held to the highest labor standards for treatment of its employees. Based on Wal-Mart�s profitability, the company should be expected to set the gold standard in terms of wages and benefits.
Oh, please. These guys are so full of it sometimes.

Look at the per employee profitability of ~0% unionized Wal-Mart compared say to 64% Teamsters-unionized UPS, and you'll find that this is hot air.

Unfortunately, neither WM or UPS breaks out profit from U.S. operations (I'm not certain that's even theoretically possible).

However, Wal-Mart's profit per employee was ($10.3billion / 1.6 million) = $6416 in 2004. Since the international division earns 20% of total sales, and 25% of employees, as well as some underperforming stores, this probably underestimates U.S. profit per U.S. employee a bit, but that's the data we have from the consolidated income statement.

In contrast, in 2003 (the latest data I could find), teamsters-unionized UPS had $8140 profit per employee ( $2.9billion/356K -- see the 2003 Annual Report pages 23 and 60).

So why exactly should we expect Wal-Mart "to set the gold standard" in pay when it earns less per employee than a place that the Teamsters have heavily organized?

Conflict of Interest Notice: My brother works for UPS and is a member of the Teamsters, so if anything, I should be accused of going easy on both of them.

Posted by Kevin at 4:16 PM

Zellers Gives Up Every Day Low Prices

Some stores just can't give up the department-store-Wednesday-sale mentality:

"Wal-Mart beats it into you with their advertising, over and over, everyday low prices: 'We're constantly rolling back prices,' " Mr. Manget said. "That's what they stand for."

It is difficult to switch to EDLP, rather than establishing it from the start as was essentially the case with Wal-Mart, he added. It can take 18 to 24 months to sell the proposition to consumers.

In the process, Zellers found that customer traffic in stores was declining, leading to weaker financial results, he said. This inevitably prompted the decision to drop EDLP in some areas.

"You could call it a retreat," he said. "I'd just call it a recognition that they probably couldn't compete on traffic and everyday low prices with Wal-Mart."

Wal-Mart succeeds in EDLP because it is fanatical about slashing its own costs and passing on savings with even lower prices, said John Williams of retail consultancy J. C. Williams Group.

Without constant markdowns, the world's largest retailer doesn't need to pour huge amounts of money into price changes and advertising those changes in flyers and on store signs, he said.

Posted by Kevin at 4:00 PM

March 21, 2005

Asian HQ to Move to Shenzhen

From the sometimes amusing Xinhua:

The new building will be put into use by August 2006, said DingLiye, general manager of the company.

Ding said besides Shenzhen's location neighboring Hong Kong, support from its Chinese partners and local government also helped Wal-Mart decide to move its Asian headquarters.

Wal-Mart has opened more than 40 outlets in major Chinese cities, including Shenzhen, Beijing, Harbin and Nanjing, since its entry into China in 1996. The retailer employs more than 20,000 employees in the country.

Posted by Kevin at 11:06 AM

Store Renovations

The Fort Wayne Journal Gazette has a nice rundown of renovations being completed to local big-boxes:

Wal-Mart Stores, the largest retailer in the world, is updating the look of two of its Fort Wayne stores. The 10-week Coldwater Crossing renovation project is just ending, and the Apple Glen makeover is scheduled to begin next week....

retailers can count on an immediate 10 percent surge in sales after such makeovers....

Wal-Mart�s changes include wood-look tile in formerly carpeted areas in the apparel, shoes and accessories departments. The company is also installing new apparel racks and counters, adding in-store Subway sandwich shops and creating an updated floor plan. Some departments have been given more space and others less, depending on the volume of sales they�ve been generating.

Wal-Mart will also paint the outside of the buildings light brown when the weather warms up. Wolf said the shade is brighter than the current gray and blue color scheme....

Note the meeting of local needs:
Wal-Mart is also tweaking its offerings. Although the retail giant attributes a large chunk of its financial success to economies of scale, it remains nimble enough to respond to the demands of individual markets.

Wolf, who formerly worked in Baltimore, remembers starting with an 8- to 12-foot ethnic hair care aisle and boosting it to a 40-foot layout before he left....

Wal-Mart�s store on Maysville Road, which sits closer to an Amish population, sells more fabric, especially blue, black and white broadcloth, than its sister stores in Fort Wayne...

That location also sells greater amounts of candy and family-oriented games than other stores its size.

Posted by Kevin at 10:48 AM

March 19, 2005

Claude Charron: Closing Jonquiere is like the Holocaust

Our French Canadian readers will be happy to know that the press is reporting that "Former Parti Quebecois cabinet minister Claude Charron has apologized for comparing the tactics Wal-Mart uses to advance its business interests to Adolf Hitler's in prewar Germany."

What did he say about Wal-Mart?:

On Thursday, he touched off a controversy when he said Wal-Mart has become so big and powerful, nothing can stop it from doing whatever it wants. Its decision to close the Jonquiere outlet rather than negotiate with the newly installed legally recognized union is a good example, he said.

"In 1933, when Hitler took power in Germany, in the sick democracy of the time, people found something of a genius in him, too," Charron said. "For 15 years, the Germans were starving and feeling humiliated by their defeat in 1918. Any demagogue could succeed if he knew how to proceed.

"We know capitalism has had its share of victims, too. Wal-Mart's strategy seems to have been inspired by prewar Germany. No law, no regulation, no government can stop them and everyone has to conform to their blackmail.

"One day, as we remember the valiant opponents of Nazi cancer, we will remember the name of Jonquiere."

Well, I'm sorry, but this does not adequately describe his earlier comments or his "apology".

He actually referred to WM closing the Jonquiere store as a holocaust, and referred to the town itself as Auschwitz. [Link in French]

What a moron.

Also, he did not really apologize to WM or to its supporters; he still calls WM's policies totalitarian. The written apology, translated tells all:

Charron said he was angered by the lack of solidarity citizens were showing for the workers when they said the union got what it deserved for messing with Wal-Mart.

He said people who say that are in fact victims who have fallen for globalization propaganda and become the unwittingly accomplices of the multinational that is closing the store.

He said he was trying to say sincere, poor Germans also believed Hitler would pull them out of the mess they were in and would work for them.

"That is not to say that the biggest employer in the world does not lend itself through its practices to behaviour worthy of a totalitarian regime through its negation of rights recognized by parliament," Charron added.

In other words, the most positive characterization of his previous remarks is that he maligned those who said that the union got what it deserved by fighting Wal-Mart. He called them accomplices of a multinational, victims of an ideology of globalization, in short, dupes, just like sincere Hitler supporters. He says, basically, that these people have given up their dignity and their judgement as citizens for mere consumerism.

This is an apology??? What a smug elitist?!

In a way, though, he sounds just like the UFCW spokesperson.

H/T: The Eclectic Econoclast via the Emirates Economist.

Posted by Kevin at 12:52 PM

March 18, 2005

Sharp Shoes

Back to some more nonsense:

A man is suing Wal-Mart for injuries he says he sustained while trying on a pair a shoes.

Harley Jordan of Fall River, near Halifax, claims the injury occurred while he was shopping in a Wal-Mart store in Lower Sackville, N.S., on May 2, 2001.

While trying on a pair of shoes, he says his foot was punctured by a product security tag hidden inside.

Posted by Kevin at 9:25 PM

$11 Million for Hiring Illegal Aliens (UPDATED)


WASHINGTON (CNN) - Retail giant Wal-Mart will escape criminal sanctions but pay $11 million to settle claims stemming from a long-running federal investigation of illegal workers hired by the company's cleaning contractors, CNN has learned.

The settlement, scheduled to be announced Friday, also calls for $4 million in criminal forfeitures by 12 firms Wal-Mart (Research) hired to provide janitorial services, sources familiar with the agreement said.

Details would be nice...

The AP:

Many of the janitors from Mexico, Russia, Mongolia, Poland and a host of other nations worked seven days or nights a week without overtime pay or injury compensation, said attorney James L. Linsey. Those who worked nights were often locked in the store until the morning, Linsey... (who is representing the workers in a civil suit against the company that is still pending in New Jersey).
Note that WM had not been accused of not paying FICA or medicare taxes on these employees.

According to Reuters , WM will hold a news conference later to tell us blah blah blah.

UPDATE: Only lower management knew:

"We reiterate, as we have from day one, that our senior management team knew nothing about the employment practices of the contractors until the government contacted us seeking out cooperation," said the spokesman, Gus Whitcomb.

UPDATE 2: Marketwatch says that we need to at least double the $11million figure:

Wal-Mart spokeswoman Mona Williams said the company considers the settlement "a lot of money" that will go "to help support enforcement of immigration laws." Wal-Mart also has put in place new initiatives aimed at preventing future problems.

The company told reporters it had not yet calculated the cost of those programs. But it could be lot more than the settlement amount.

"It may be that the fine itself is only a small part of the cost. There is a pretty major oversight system the company is going to have to develop," said Greg Siskind, an attorney who specializes in immigration law at Siskind Susser in Memphis, Tenn. "For a company the size of Wal-Mart to put in the kind of system that is in this decree will cost well in excess of $11 million."

LAST UPDATE: Of course, Wal-Mart's press release reads like a wonderfully prepared news article (this is how things are "supposed to" be done):

No Criminal Charges Filed Against Company or its Associates

BENTONVILLE, Ark., March 18, 2005 � Wal-Mart Stores has resolved on a civil basis the Department of Justice�s more than four-year-long investigation into the employment practices of its former floor-cleaning contractors. The agreement came after the government concluded its criminal investigation and announced it would not pursue charges against Wal-Mart or any Wal-Mart associates.

As part of this civil settlement, Wal-Mart has agreed to support the fair enforcement of immigration laws, including making a payment of $11 million to the government.

�The government can now use the funds for training and other initiatives that lead to better detection and prosecution of individuals and companies that prey on undocumented individuals,� said Tom Mars, Wal-Mart�s general counsel. He went on to emphasize that all businesses have a responsibility to remain vigilant.

�Today we are acknowledging that our compliance program did not include all the procedures necessary to identify independent floor cleaning contractors who did not comply with federal immigration laws,� Mars said. �We will use this as an opportunity to improve and be a better, more tightly run business as a result.�

Wal-Mart has already begun building stronger internal controls into its contractor review process. The company has also instituted a policy that requires floor cleaning at its domestic stores to be done by Wal-Mart associates.

The civil consent decree and settlement documents between Wal-Mart and the government read in part:

� �� enforcement actions undertaken by Special Agents of the Immigration and Naturalization Service, and its successor agency, Immigration and Customs Enforcement, against floor cleaning contractors performing cleaning services at various Wal-Mart stores in the Middle District of Pennsylvania and elsewhere documented that independent contractors used by Wal-Mart to provide floor cleaning services were knowingly hiring, recruiting and employing [undocumented workers] in violation of Title 8 ��

� �� Wal-Mart did not have knowledge, at the time the independent contractors initially were hired, that the independent contractors knowingly hired, recruited or employed [undocumented workers] in violation of Title 8 ��

� �� following a thorough investigation, the United States concluded that federal criminal proceedings involving Wal-Mart, its directors, officers or [associates] would not be appropriate ��

Posted by Kevin at 11:25 AM

March 17, 2005

WM "Sex" Ban in Germany (UPDATED)

UNI Commerce reports:

Wal-Mart's new informer hotline and ban on sexual relationships between staff has caused an unprecedented media storm in Germany.

Today's Bild, Germany's largest and most popular newspaper, flashes a full page on the "Sex Ban for Wal-Mart Employees" and says that the "Retail giant wants to regulate the private lives of its employees".

- "Honesty, respect, fairness and integrity", this is how the US retail giant Wal-Mart formulates its business values, writes Bild.

- In reality, the U.S. supermarket group is leading its employees from the nose. Now, a 28-page "Ethics Code" creates an uproar among its workforce. Wal-Mart even wants to sniff around even the love life of its employees, Bild says.

It links to Bild and Der Spiegel.
Yubanet translates Deutsche Welle:
Often mistrusted for its American corporate culture, the German subsidiary of Wal-Mart has once again stuck its foot in it. Employees of the 92-store discount chain received a moral lecture along with their February paychecks: a code of ethics employees must follow or face termination, the Financial Times Deutschland reported Tuesday.

The code forbids Wal-Mart employees from accepting presents from suppliers, dictates that employees may not fall in love with a colleague in a position of influence and requires workers to report colleagues immediately "if they observe that they have broken the rules." Non-compliance of the rules can lead to termination.

Here is a direct link to a Google Translation of the Der Spiegel article (not provided by the message-controllers at UNI Commerce):
In addition the dear life of the coworkers is strictly regulated. "you may not go out with someone or step into a dear relationship with someone, if you or the coworker your conditions of work can to be able to affect the conditions of work of this person affect", prescribes the Kodex.
All this is fairly standard in the US, especially among management.

Also in Germany, according to labor groups, WM is threatening to close down German stores (like it did in Canada) if flexible hours and store videocameras are not permitted.

Also here's a link to a google translation of the Verdi union's summary of WM news in Germany, which I will now read regularly.

I find it very amusing that Google translates Wal-Mart from the German as "Whale Mart".

UPDATE: UNI Commerce goes even further, insisting that an informant hotline is akin to Stasi techniques:

Wal-Mart's decision to establish an obligatory informants' hotline in Germany reminds many Europeans of times that they would rather forget. Using informers was an important part of the repression machinery of the communist regimes in Europe, including East Germany's infamous secret service Stasi.
The important difference between WM and East Germany being that Wal-Mart is not a Communist, tyrannical, murdering government with a gang of secret police that will take you away in an unmarked black vehicle for wanting to live in freedom. Also, as far as I can see from the map of WM stores in Germany, onlyb 8 of the 90 or so WM's in Germany are located in the much less prosperous former East Germany (the upper-right-most five large regions, as seen in this map).

Other than that, the similarity between WM's informant line and the Stasi is well taken.

Posted by Kevin at 12:43 PM

NLRB Hearing on March 25th

The UFCW has convinced the NLRB to conduct a hearing on whether WM intimidated workers during the recent Loveland union vote:

After workers at the Wal-Mart Tire & Lube Express in Loveland rejected unionization 17-1 in a vote February 25, a spokesman for United Food and Commercial Workers Local 7 said the union would ask the NLRB to dismiss the results. Local 7 spokesman Dave Minshall had said no union member was allowed to observe the election and that Wal-Mart added employees to the unit to dilute the strength of the union supporters.

"The claims made by the UFCW are simply not true, and we are confident that the (NLRB) regional office will find no evidence of these allegations," said Christi Davis Gallagher, a spokeswoman for Bentonville, AR-based Wal-Mart.

A hearing was scheduled for March 25 at the NLRB office in Denver.

"After a preliminary investigation I have concluded that the [union's] objections raise substantial and material issues of fact, including credibility resolutions, which can best be resolved at a hearing," NLRB regional director Allan Benson said.

This should be interesting.

Posted by Kevin at 12:30 PM

Ex WM Worker on Hunger Strike

Day 7, and still going strong (rr):

Heading into Day 7 of a hunger strike -- he started two days after being fired from his job as a $15.95 per hour verifier at the Wal-Mart Distribution Center in Loveland -- Ryszard Tomtas isn't ready to give up.

"I kind of want him to just come back and not stay out there anymore," said Marcin, who has gone out to sit with his father a couple of times. "I hope he just gets his point proven ... and just comes back here. It's kind of weird thinking of him being out there for a month or so."

Tomtas, 46, of Loveland is protesting his firing by camping just outside the parking lot of the distribution center, the same workplace he said a supervisor and a fellow employee had sexually harassed him 30 times since 2000. Wal-Mart spokeswoman Christi Davis Gallagher of the corporate office in Bentonville, Ark., said Tomtas was terminated because he violated policy on workplace violence.

Tomtas, a Polish immigrant who worked at the distribution center for 13 years, said Wal-Mart accused him of kicking somebody.

"I never kicked anybody," said Tomtas, who was fired on March 8.

Tomtas said he's not hungry, he's feeling great and that he's in good spirits.

A sensible commenter notes that since we don't know the facts here, it's really hard to judge anything about this case.

Posted by Kevin at 12:25 PM

WM vs. Class Actions

Aaron Bernstein in Businessweek:

Corporate America could find it a whole lot easier to fight off employment class actions if Wal-Mart Stores Inc. (WMT ) prevails in a sex discrimination case to be heard soon by the U.S. Ninth Circuit Court of Appeals. Indeed, a Wal-Mart victory could tilt the playing field for virtually all of these kinds of suits, which have plagued Boeing (BA ), Coca-Cola (KO ), and dozens of other large employers over the years.
This seems very optimisitic to me, but I'm no lawyer. Later on, we find that:
The thrust of Wal-Mart's appeal is that the district judge ran roughshod over the company's constitutional rights to due process and to a jury trial. Despite the company's reputation for micromanaging down to the penny, it argued that pay and promotion decisions are made almost entirely by local store managers. So the judge should have ignored the plaintiffs' statistics showing large nationwide disparities in the way female employees are paid and promoted. Instead, it should hear only store-level suits.
This is an excellent strategy for WM to take, since the plaintiffs themselves had to assert that discrimination occured because WM gave too much control to store managers:
Central to the plaintiffs' case is the contention that Wal-Mart is a heavily decentralized company, in which managers are given wide latitude to make hiring, pay and promotion decisions. This, the lawyers argue, is a bad thing, because it leaves too much discretion in the hands of store managers, who can thus be influenced by their own negative stereotypes. Under this scenario, decentralization in management, which has been one of the core productivity-boosting principles of American business in the last two decades, becomes something that companies must avoid or limit.
See older posts on George's Employment Blawg for some more info, and an older article about the data used to buttress both sides. And via Point of Law, we find a article that thinks the Dukes case could be very bad news:
Dukes v. Wal-Mart Stores, Inc., may be a sign of things to come. Employment class actions are on the upswing, say labor and employment lawyers at four large firms. Costco Wholesale Corp. and Sav-On Drug Stores, Inc., are among the other large companies facing high-profile class actions....

The effects of the class certification in Dukes v. Wal-Mart may be far-reaching, says Emory University labor and employment law professor Charles Shanor. Wal-Mart argued that its 3,200 U.S. retail stores made wage and promotional decisions independently of one another, so any discrimination claims deserved to be treated store-by-store, case-by-case, rather than through a class action. But the district court disagreed, allowing the plaintiffs' claims to proceed based on an overall statistical picture that showed female employees were disproportionately paid and promoted less than their male colleagues.

"I'd tell [GCs at large companies] to watch Wal-Mart, because it will have a huge impact on your flexibility in decentralizing employment decision-making," says Shanor. Wal-Mart has appealed the certification; at press time the 9th U.S. Circuit Court of Appeals had not yet ruled on the appeal.

Because of the unprecedented size of the class in the Wal-Mart suit, it's easy to forget that the content of the case itself -- alleged gender discrimination in a large corporation's employment practices -- has ramifications, too. In certifying the class, the court was concerned that promotion and salary decisions were characterized by "excessive subjectivity" -- a phrase that could turn out to be fraught with peril for many other companies. "At the end of the day, the evaluation of performance necessarily entails subjective judgment, unless there's a completely formulaic description of duties and expected results," says associate GC Reginald Govan of the Federal Home Loan Mortgage Corporation, based in Maclean, Va. In August Wal-Mart rival Costco was hit with a suit, also seeking class action status, that echoes the claims of the Wal-Mart action.

Posted by Kevin at 12:21 PM

March 16, 2005

Prof. Bainbridge's Conservative Case Against WM

I missed this well-rounded net assessment of the economic impact of Wal-Mart, which is guided by an understanding of the importance of the small retailer in American economic life. He concludes thus:

Being a conservative is supposed to be about things like tradition, community, and, yes, aesthetics. If I'm right about that, it's hard to see why a conservative should regard Wal-Mart as a societal force for good even if Hugh's right about the job story.

So what do we do? Well, we must strike a balance between respect for private property rights (see my Kelo post) and our other values. How? On the one hand, government should not legislate against Wal-Mart and its ilk. On the other hand, government should not subsidize Wal-Mart either through zoning or tax breaks. Wal-Mart�s a big boy, so to speak, who can take care of itself. We ought to let it compete in a free market. And those of us with a bully pulpit out to use it to encourage Wal-Mart to become a better neighbor and citizen.

I'll note one thing; this is perhaps the most honest, respectful, and courteous WM-cautionary tale I have read since starting this blog. Even when dissing WM, one fails to find nastiness in Prof. Bainbridge's prose...

Posted by Kevin at 1:24 PM

Dealing with RFID

How three companies tried to meet the January deadline for RFID, with a frank admission:

Matthews admits the costs of RFID are now greater than the benefits to his company. Pacific Cycle hopes to get a better view of the supply chain from manufacturing all the way through to the display space at stores. But "as we get into Generation 2 [technology] and costs come down, we are hoping that in another year-and-a-half to two years we will start to get a real return off of it," says Matthews.

Posted by Kevin at 11:40 AM

Comparing WM to High School Baseballers

I kind of like the idea that WM's prices are so good that it has become a gold standard of value for some non-market activities:

It appears that the best bargain in town may not remain a secret for long.

Despite the cornucopia of bargain bins and "Roll Back the Price" items at the Wal-Mart on Lanikuhana Avenue, it is a sure bet that Mililani High School's senior tandem of Tony Aquino and Chaz Miyashiro will give you a lot more bang for your buck....

Like Wal-Mart down the street, Sato displays his top two items in plain sight, batting Aquino and Miyashiro 1-2 in the hitting order....

With Aquino and Miyashiro each providing outstanding two-for-one values, it seems as if the Mililani baseball program has found the best deal in town.

And it didn't come from Wal-Mart.

Posted by Kevin at 11:19 AM

March 15, 2005

Why is WM the Top Jewler in the US?

I've been wondering about this (press release):

In 2004 American consumers spent $57.4 billion buying jewelry and watches, a dramatic 6.9 percent increase over previous year. As a category in the durable goods segment, jewelry and watches outperformed the overall durable goods sector, which only rose 4.7 percent by comparison.

Jewelry and watches were purchased by half of U.S. consumers in the past year, with �twenty-something� to �fifty-something� women with higher incomes representing the core target market.

For the last several years discounter Wal-Mart has been the nation�s #1 retailer of jewelry, despite the fact that the prime target market for jewelry -- high-income women from 25 to 54 years -- are the least likely of all consumers to shop for jewelry in discount channels.

How are jewelry marketers and retailers to understand this dichotomy in the marketplace -- that the ultimate luxury good is sold most by the nation�s top discounter and that lower-income shoppers who spend under $100 on each item of jewelry bought have propelled Wal-Mart to their #1 position?

No answer is given. And the full report costs $2,700 Euros, so we will have to do with assuming that the lower-income market is just, you know, larger, than the alleged "core target" demographic.

Posted by Kevin at 1:39 PM

March 14, 2005

WM Closes All Stores [Humor]

Via the comments on this Blogcritics post, we have a wonderful spoof:

TORONTO (AP) A loud noise was heard in Jonquiere, Quebec as the door slammed shut at the local WalMart store. The worldwide retailing giant decided to close the doors to its store rather than give in to demands to unionize the huge discount store. The sound echoed throughout the region causing other WalMart stores to close. One by one, WalMart closed down operations at each store as the news of the Jonquiere closing spread. Fearful of having to pay workers a decent living wage, the corporate giant instead chose to quit doing business rather than start dealing with labor unions....

The ripple effect of the WalMart closings hit the Upper Peninsula of Michigan by noontime and loud cheering could be heard all across the state....

All across the mid-west and then extending out to the east, south, and west the store closings continued throughout the day....

In world developments, thousands of sweatshops in Sri Lanka, Pakistan, Indonesia, Thailand, and Costa Rico closed up shop. Worst hit was China where thousands of factories that produced low quality merchandise for WalMart were closed and the workers were sent back to the fields....

As the sun set on the west coast, the last Walmart store locked its doors...

At the Vatican, Pope John Paul II got out of his bed to give his blessing to the WalMart store closings. �This is the best news since the end of communism!�

A satire is funny when built on truth. However, the idea that most small businesses pay better wages and benefits than WM is completely unsupported by data, or my own personal andecdotal evidence. Still, fables built on myths are interesting structures...

Posted by Kevin at 10:20 AM

Blog Roundup (Updated)

Here are a few recent posts from around the blogosphere.

Blog Retrofuturistic supports WM but finds that it can support private vices just as much as the public good

I, on the other hand, love the idea that by shopping at Wal-Mart, I can now afford to buy box cereals again. I pay $2.89 for cereals that would be well over four bucks at the Albertson's. And look at the beef prices! And those little tubs of flavored Philadelphia brand cream cheese! And Breyer's ice cream, which I wish was a little more expensive so I could more easily avoid letting it into my shopping cart.

Say, maybe MoveOn is right. Maybe those Wal-Mart bargains aren't such a good thing after all.

The Box Tank discusses the forces arrayed for and against Wal-Mart in Staten Island

Wal-Mart finds a good chance of finding support in Staten Island as it is the most suburban of New York's five boroughs. The retailer already has the support of the head of the Staten Island Chamber of Commerce and Borough President James Molinaro, and Councilman Andrew Lanza (R-South Shore),

On Provincial Paradigm, Doris Myers claims to have personally witnessed the destruction of her own community at the hands of WM

The reasons I hate Walmart are many. To begin with... they SUCK the life out of every community they infest. I watched it happen in my own community. They literally destroyed the entire nature of this community. They pay disgustingly low wages.... they even have the nerve to hand out applications for food-stamps and medicaid when you get a job with them. So, not only do they drive small businesses into oblivion... they have the gall to expect our County to subsidize them with money for food and medical care for their employees. I USED to occasionally shop at Walmart.... so I WITNESSED the oppression their employees are forced to toil under. They are treated like second class citizens. I find their policies to be reprehensible. The expectation that this company has, to collect biological material and to treat their employees like criminals from the start, is so distatsteful to me, that myself and my family (I would NEVER allow my kids to submit to such demeaning treatment under ANY circumstances.... let alone for the 'privilege' of working for a dictatorial company that pays SLAVE wages) would live in a tent and STARVE before any of us would work for them. They built their 'empire' on the PROMISE that EVERYTHING in their store is MADE IN AMERICA.... that is the only reason I ever began to shop there.... obviously they have violated that promise and in doing so, they have betrayed every customer that fell for their lies. They build factories in PRISONS and use slave labor in their manufacturing in China.
There's lots more! [Update: Why would I link to this? Because I think it is an almost cogent example of the nonsense that WM must battle. I must say that Doris presents no real evidence or argument at all. WM is evil, and must be stopped. Death is preferable to WM! QED. Please?! She even fails to tell us the town that WM allegedly destroyed.]

Coffee House Studio links to Ruth Coniff of The Progressive who writes about WM, but more importantly thinks that Marshalls and TJ Maxx profit off of putting small businesses out to pasture!

Places like TJ Maxx and Marshall's profit from the liquidation of smaller retailers that pay higher rents and charge higher prices because of their downtown location and small size. It's a perfect business plan: Undercut these little shops, then sell their remaining inventory when they go belly up. More and more of us, even if we like our local mom and pop businesses, drive out to the edge of town, vulture-like, to pick over their remains and snap up the "great deals."
Uh, that's not where those companies get their merchandise...

Get the Word Out seems to have forgotten that Wal-Mart actually managed to open a store in Chicago:

QUEENS, N.Y. (PAI)--First it was Los Angeles, then it was Chicago. And now it's the borough of Queens in New York City.

The nation's largest retailer, Wal-Mart, has been forcibly thrown out of the nation's three largest cities due to its low wages, bad benefits and anti-worker policies.

The Chicagoist noted the groundbreaking in February:
After a ton of debate the City Council approved the building of Chicago's first Wal-Mart on the city's West Side. A huge crowd showed up yesterday for the groundbreaking ceremony which included a high school band and a ribbon cutting. But the protestors also showed up.

Posted by Kevin at 9:52 AM

March 11, 2005

Teachers Won't Be Reimbursed for Shopping at WM

In Washington state, theWashington Education Association's Children's Fund reimburses teachers for school supplies purchased. The teacher's union has decided that it will no longer reimburse teachers for items purchased at Wal-Mart:

When it's time to pick up supplies for her third-grade classroom, Jennifer Strand would prefer to steer clear of Wal-Mart.

The teacher is convinced the retail giant isn't paying workers a fair wage, but in the northeastern Washington town of Colville -- population 5,000 -- the only other option is a small stationery section in the local grocery store.

So Strand became a reluctant Wal-Mart shopper -- venturing in from time to time to pick up supplies and emergency items for disadvantaged students, such as coats and shoes. She'd get reimbursed through the Washington Education Association's Children's Fund, a decade-old charity that provides up to $100 per student each year.

Not anymore.

Taking a bold political stand, the state teachers' union last week declared the fund off-limits to Wal-Mart purchases.

How exactly is it a bold political stand? I'm not really sure considering how politcally active teachers unions have been for years.

This my favorite quote:

A Spanish teacher at Columbia River High School in Vancouver, Olveda lauded the association's move and said she refuses to shop at Wal-Mart, as do many of her colleagues.

"One of my students has an 80-year-old grandmother who works there and has no benefits," she said. "There are so many other places we could be spending our money other than Wal-Mart. Granted, they have lower prices, but it's because they're predatory."

Nevermind that if WM had to pay for healthcare for this person, she wouldn't have a job.

Posted by Bob at 3:07 PM

March 10, 2005

Murphysboro Residents Fight Back

Since there are no zoning or land-use ordinances in the County, the city wants to push a new WM Supercenter away from a residential neighborhood, and then annex to the city the area around WM so that the city gets the tax revenue.

Talk about having cake and eating it too:

"The county has basically no jurisdiction. Jackson County has no zoning, has no land use ordinances. So we have no authority to stop anything from coming into any area of the county," says Gary Hartlieb Chairman of the Jackson County Board.

So with little to no leverage in where the super store will be built, the only other alternative city leaders have as an option, would be to zone the area into the city limits.

"It's going to be much harder to go out and reach out and bring that property into the city of Murphysboro. So with the city fathers, or whoever would be Mayor, would have to step up I think and make an attempt to annex that area in. We would need that sales tax revenue," Mayor Williams said.

Posted by Kevin at 11:19 AM

The Impact of Jonquiere

WM employees are claiming that both WM and the UFCW are applying undue pressure since the Jonquiere closing was announced:

Workers at various Wal-Marts around Quebec say they are being pressured by both management and labor. They describe a workplace atmosphere poisoned by rumor-mongering, insults and damage to personal property.

Anti-union workers at the Ste-Foy store, which other workers are trying to organize, reported unwanted visits to their homes in the middle of the night by organizers during the unionization drive. Two pro-union cashiers at the St-Hyacinthe store near Montreal reported that they recently had shortages in their registers, which they maintained were the work of management trickery to get them into trouble.

"This store is basically hell right now," said Noella Langlois, 53, a clothing saleswoman in the Jonqui�re store who opposes unionization. "You have two deeply divided clans."

UPDATE: The version of Clifford Kraus' article linked above was in the International Herald Tribune. The IHT leaves out some very interesting details from the same article in the New York Times:
Intimidation appears to go both ways, according to workers at three Wal-Mart stores in Quebec.

Sylvie Lavoie, a 40-year-old single mother and part-time cashier in the Jonqui�re store who says she needs a union, accused store managers of taking workers aside before the secret vote and warning them that a union would mean the store would close.

Afterward the workers came to union organizers crying and pleading for promises that they would not lose their jobs.

"They intimidate and do what they want," Ms. Lavoie said.

But Steve Lemieux, a 20-year-old cart pusher in the Ste. Foy store, says it is the union that is the abuser. "People who are for the unions have trouble accepting other opinions and they keep knocking on our doors to get us to sign their cards," he said.

"We don't need a union since there is easy advancement if you work for it."

The IHT has:

But in contrast to their counterparts in the United States, unions in Canada have had traces of success in organizing at Wal-Mart.

While the NYT has:

But in contrast to their counterparts in the United States, unions in Canada have had traces of success in organizing. For the giant American chain, Jonqui�re has become another barricade in its battle to keep unions out of its business.


Unionizing efforts at Wal-Marts in North America have virtually never made progress.


Unionizing efforts at Wal-Marts in North America have virtually never stuck.

In the IHT, but not the NYT:

In Windsor, union leaders said Wal-Mart posted news of the Jonqui�re closing in the lunchroom; Wal-Mart says if such a posting was made, it was by an employee and not the corporation.

Posted by Kevin at 11:13 AM

Man Steals ATM w/$60K From WM;

This is just bizarre:

The heist, as described in an FBI affidavit filed last Thursday in U.S. District Court in Umatilla County, allegedly began the morning of Nov. 29. About 7:30 a.m., McElvain walked into Wal-Mart with a handcart. The ATM, however, was too heavy. Ten minutes later, he returned with a friend, Shane Giese. The two men wheeled the tarp-wrapped ATM out of the store.

As they strained to lift the machine into a Nissan Pathfinder sport utility vehicle, part of the tarp lifted. Giese glanced in. It was no gun safe, as McElvain had told him earlier. Giese refused to help any further, forcing McElvain to leave the ATM on the parking lot curb, the affidavit said.

The job, it seemed, would require a more specialized device.

The next day, authorities visited McElvain's parents. McElvain's mother, Ida, told authorities her son and another man had been at their La Grande home the previous day working in their shop most of the afternoon. Ida McElvain, the affidavit said, couldn't understand why her son had taken the popcorn cooker, a large, heavy cauldronlike object, off his tilt trailer.

I really like that he could leave it in the parking lot and return later, without anybody questioning what was going on.

Posted by Kevin at 11:06 AM

Carrefour Pulls Out of Japan

But Wal-Mart remains:

Domestic media reports said Carrefour, which is due to announce its full-year earnings in Paris at the same time as Aeon's news conference in Tokyo, would likely sell all eight of its Japanese stores to Aeon for about 10 billion yen ($96.17 million).

The expected pullout is evidence of the difficulty that bulk-selling foreign entrants such as rival Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research) have had in cracking Japan, where famously fickle consumers buy whatever they need in small amounts every few days.

Carrefour has also struggled to overcome weakness in consumer spending since it entered the Japanese market in 2000.

The sector still faces flagging sales, with overall supermarket store sales in Japan down 3.5 percent last year and a 0.7 percent fall in same-store sales at convenience store chains, industry data shows.

Wal-Mart, the world's No.1 retailer, has struggled in Japan and its affiliate Seiyu Ltd. (8268.T: Quote, Profile, Research) appears to have not yet adapted to the U.S. parent's sales strategy, having reported losses for three straight years.

Once settled, Aeon will be developing even more hypermarkets in Japan.

Posted by Kevin at 11:00 AM

March 9, 2005

No Union for Windsor, Ontario WM

As Bob noted, there was to be vote to unionize the WM in Windsor, Ontario. That vote failed 167-59 (press release):

MISSISSAUGA, ON, March 9 /CNW/ - Wal-Mart associates in Windsor, Ontario, have voted resoundingly against being unionized by the United Food and Commercial Workers Union (UFCW). In a democratic, secret-ballot vote held yesterday at the Windsor store, store associates in the union's proposed bargaining unit voted 167 to 59 against joining the union, representing a 74 percent majority of associates voting against certification. This marks the fourth time in less than two years that Wal-Mart Canada associates have voted against being represented by the UFCW.

This result does not include more than 50 additional ballots that were cast at Wal-Mart's request by hourly store associates who the union is attempting to exclude from the vote.

We hereby initiate a new category for ALP, "Associates Rejecting Unionization.

Also, please do not confuse Windsor, Ontario with Windsor, Colorado; in the latter there was a wild Supercenter debate, not union issues.

UPDATE: The UFCW, once again, charges WM with "intimidation", and demands another vote.

Posted by Kevin at 11:57 AM

March 8, 2005

Daniel Akst: WM's stock is not a buy; it's goods are

Virginia Postrel thinks Daniel Akst has WM's number. I dissent (unions play a far bigger role in criticism and I think that the unions will not get to WM, and that WM has already gotten to them), but I'll leave that to another post.

Here, I want to focus on one paragraph in Mr. Akst's Sunday column in The New York Times.

Mr. Akst, who is a fine business commentator and sometime Wal-Mart shopper, wrote that WM shoppers are having it good at stockholder expense:

For several years now, the shareholders, who have more than $200 billion tied up in the company, have not done especially well. Since the end of 1999, Wal-Mart stock is off 23 percent, while Target is up 43 percent and Lowe's is up 95 percent.
Fundamentally, I agree that WM stock has been an underperformer. But Akst does something rather fishy to get his figures. To check this out for myself, I graphed a stock price comparison of Wal-Mart with Target since 1/1/2000, reproduced below. It confirms Akst's numbers -- -23% for Wal-Mart, + 43% for Target:

WMT TGT Since 1-1-00.gif

But why would Akst compare WM's stock price today with the end of 1999? Why not the end of 1998 or 2000?

The answer is obvious once you look at a ten year picture of WM's (split-adjusted) stock price:

WM 10 Year.gif

Notice anything odd? That's right! Akst picked WM's historical high as a baseline. ; he cherry-picked his date of reference to make WM look especially bad! It turns out that very, very few investors will have realized a 23% loss by investing in WM over the past 5 years.

Of course, noting this does not refute the underlying claim of poor stock performance. Since the peak in WM's stock price at the end of 1999, the stock has leveled off and fluctuated in the 50s. I'd say don't count WM stockholders out yet, since a price dip has happened before--between 1993 and 1997--right before WM's stock took off.

WMT Since 72.gif

Still, over the past 10 years, WM's stock has fared pretty well, but not compared to Target:

WMT TGT 10 Year.gif

And for the sake of completeness, here's WM vs. Lowe's (a home improvement store, huh?), which fits Dan Akst's picture:

WMT LOW 10 Year.gif

But why doesn't Akst compare WM to his own preferred warehouse discount center, and one of Sam's Club's main rivals, Costco? Because CostCo's stock price crashed in 2000, and it doesn't fit Akst's story:

WMT COST 10 Year.gif

Also, I'd like to note that WM's stock dividends are far higher than it's rivals, and have increased annually every year since 1974.

WM's 60 cent (1.2%) dividend puts Target [32 cent (0.6%)], Lowe's [16 cents (0.3%)], and Costco [40 cents (0.9%)] to shame.

Posted by Kevin at 4:35 PM

March 7, 2005

Will higher wages at WM lower poverty rates?

David Neumark gives us a starting point to an answer:

It's conceivable that the minimum wage could be a boon to the poor even though it destroys some jobs. Those low-wage workers who keep their jobs are better off, after all, and they are bound to outnumber the losers. The net effect could be beneficial to those at or below the poverty line. Neumark and Wascher, however, have found that for every poor family that gets out of poverty thanks to a change in the minimum wage, there is a non-poor family that falls into poverty.

Neumark, now with the Public Policy Institute of California, says that many low-wage workers aren't poor, or even close to it. About a third of them, including a lot of middle-class teenagers, live in households with above-average incomes. Raising the pay floor makes it easier for them to buy gasoline and movie tickets, but it does nothing to combat poverty.

What's more, he's found, the people most likely to lose their jobs because of the minimum wage are not middle-class teens but poor adults.

H/T: The other Craig Newmark

Posted by Kevin at 5:11 PM

Goodbye Size Restrictions!

Wal-Mart has decided to build two adjacent, non-connected, and size-limit-obeying stores in order to circumvent a Dunkirk, MD big-box restriction.

Store officials said plans for a single big store were thwarted by a size limit adopted last year.

The store and garden center in Dunkirk will have separate entrances, utilities, and restrooms, said Wal-Mart officials. They also said the combined size of the stores will be 30 percent larger than the 75,000 square-foot limit for a single store.

I was wondering when they were going to start doing this. The WaPo goes on:
Calvert County Planning Commission members said they might approve the proposed Wal-Mart because the facility is technically two stores -- a 74,998-square-foot main site with an adjacent 22,689-square-foot garden center -- that appear to conform with the regulations.

"There is a loophole," said Grace Mary Brady, a Planning Commission member.

This loophole exists because the more restrictive the law, the more likely it is to be thrown out in court. Active public sentiment is 50/50:
Some residents have expressed their support for larger Wal-Marts and the current Dunkirk proposal. Brady said the 20 e-mails she recently received about the Dunkirk store were evenly split between supporters and opponents of the site plan.

Posted by Kevin at 1:05 PM

March 6, 2005

College Ain't What it Used to Be

As an undergraduate, I had far more important things to do -- like studying and making a living -- than play around in WM:

An unexpected wrinkle has developed in Wal-Mart's 24-hour megastores, with college students spending late hours playing games with merchandise.

Citing a store in Flagstaff, Arizona, the Wall Street Journal told of Northern Arizona University students travelling in groups of six to play a game called "10 in 10". The captains of two teams each spend 10 minutes putting 10 items into a shopping cart....

Students at Taylor University in Upland, Indiana, play a version called "A-Z", in which the team that first finds an item for every letter of the alphabet wins.

Posted by Kevin at 4:12 PM

Reverse the Order...

We usually think of WM replacing small retailers. Don Boudreaux asks, what if it were the other way around?

Suppose that Wal-Mart today is the only retailer in town, situated (as it typically is) on a large plot of land a few miles from downtown. Tomorrow, smaller rivals open up on Main Street. Further suppose that each consumer truly wants the Wal-Mart to remain open. (Perhaps consumers have become familiar and grown comfortable with Wal-Mart.) But although each consumer truly prefers that Wal-Mart survive, each consumer also chooses to patronize the more conveniently located downtown retailers. That is, each consumer tries to free-ride on what he hopes will be other consumers� continued shopping at Wal-Mart. But with each consumer acting in this way � with almost all of them opting to enjoy the greater personal convenience of patronizing the close-in Main Street retailers rather than suffering the inconvenience of driving out to the Wal-Mart � the Main Street retailers prosper and the beloved Wal-Mart shuts down.
If that sounds implausible or silly to you, think about what the same argument implies to the current situation, when it is WM that is replacing small retailers....

Posted by Kevin at 3:38 PM

Retail Explosion in La Quinta, CA

WM initiates a flood of national retailers:

LA QUINTA - Since the March 2004 debut of Wal-Mart's first California Supercenter, a steady parade of other retailers has moved into the Highway 111 corridor to serve this growing east valley city.

Shopping and dining choices have boomed, and city coffers are reaping the benefits in the form of increased sales tax revenues.

In just the past year, the long list of new stores opened has included Target, Kohl's and Circuit City.

And yet another major player is set to join the fray.

City officials confirmed this week they are reviewing plans by Sam's Club, the warehouse store division of Wal-Mart Stores Inc., to place a new 136,000-square-foot Sam's Club, slated to include its own gas station, on 12.5 acres along Dune Palms Road, just east of the Wal-Mart Supercenter.

Did La Quinta have an old retail sector? If so, how is it doing?

Posted by Kevin at 11:03 AM

Teen WM Associate on "General Hospital"

Just a nice story:

For the walk-on role, Kassie Crose of Green Bay received a paycheck in the mail for $286.53.... as Crose points out, "Pretty good money for only three hours of work."

Only three hours of work, but a lifetime of dreams and a literal wish-come-true for the 19-year-old, whose all-expenses-paid trip to Los Angeles brought the fulfillment of a wish granted by Kids Wish Network, a nonprofit organization dedicated to creating happy memories by granting wishes to deserving kids.

The Florida-based organization... based their decision on the teen's long battle with complex cyanotic congenital heart disease. The blood Crose's heart pumps contains extremely low levels of oxygen, which can make it difficult for her to even make her way across a room without becoming short of breath....

Crose might be undecided about pursuing acting as a career, but one thing is certain: She will be somewhat of a celebrity Monday afternoon when she reports to work at Wal-Mart. "Everybody at Wal-Mart is really excited," she said. "They're going to watch it in the break room."

Posted by Kevin at 11:01 AM

WM Supercenter in Woodland Park, CO

In The Gazette, Rich Laden has written an excellent broad overview (cached version) of the debate over big boxes--and WM in particular--in Woodland Park:

But in a town such as Woodland Park, a scenic, 20-minute drive up Ute Pass from the Springs and home to about 7,000 people, opposition to Wal-Mart isn�t just about the retailer�s corporate policies.

Simply put, much of it hits close to home. Some residents worry a Wal-Mart store � or a Target, Home Depot or other big box � would disrupt the town�s character with more people, traffic and even crime, while it changes customer buying habits and harms longtime mom and pop businesses.

Woodland Park voters will decide May 3 whether to enact a six-month moratorium on retailers larger than 75,000 square feet.

�Woodland Park is a very unique community,� said Erik Stone of Citizens for Responsible Growth, the anti-Wal-Mart group. �It serves very much as a bedroom community for Colorado Springs. It�s a sense of place.

�When you�re there, you�re somewhere with incredible natural beauty. You have Pikes Peak above the town. Big retailers, whether it�s Wal-Mart, Kmart or Home Depot, anybody of that size and scale, we don�t think it�s a good fit for the community.�

The politically active, adult (non-felon?) members of the community will now decide the issue for everyone.

Posted by Kevin at 10:55 AM

March 5, 2005

Update on Afaf Saudi

In November, we brought you the story of Afaf Saudi, who accused a WM employee of stealing money from her, kicked an assistant manager, and went limp when police officers tried to take her away.

Now Ms. Saudi has failed to appear in court, and has apparently returned to Egypt to avoid facing misdemeanor charges:

GREENSBORO, N.C. -- The Muslim woman whose arrest at a Wal-Mart store prompted an outcry about police tactics skipped a court hearing and is wanted by police.

Afaf Saudi, 68, failed to appear Friday to face misdemeanor charges of simple assault, second-degree trespass and resisting a public officer.

Her attorney, Seth Cohen, told the judge that Saudi had moved back to her home country of Egypt since her arrest in November and he did not believe she planned to return to the United States.

"She thinks she did nothing wrong," Cohen said after the brief District Court hearing.

Judge A. Robinson Hassell issued an order for her arrest on a charge of failing to appear in court.

Saudi, an Egyptian citizen and legal resident of the United States for 12 years, claimed two Greensboro police officers mistreated her after she refused to leave the discount retailer on Nov. 6. She suffered bruises to her wrists and arms and also injured her shoulder and ribs in a fall by a police cruiser.

A police department administrative review determined the officers followed proper procedure.

I received quite some flack for my accusation that Ms. Saudi was pretending to be a victim, and that she let herself be used by Muslim groups wanting to conjure up evidence that there is a crisis of anti-Islam action and sentiment in the U.S..

You all might be interesting in looking at the data on hate crimes against Muslims, from the FBI, and available on the FBI website. In the extended entry, I have pasted those statistics, as part of the relevant text of an email I sent to one interlocutor:

Thanks for the reply. I'm not blowing you off; I just hadn't had time to look at the raw FBI statistics. The 2001 figures are indeed dismal, but here's a time series that indicates a change for the better.

Year Number of Anti-Islamic offences/incidents/victims from FBI Hate Crime Report (
1997 31/28/32
1998 22/21/23
1999 34/32/34
2000 33/28/36
2001 546/481/554
2002 170/155/174
2003 155/149/171
2004 Not Avalilable Yet

I was wrong; There was more than a small spike in 2001. I hadn't realized the severity of the increase. But given that there are more than a million self-described devout muslims in the U.S (see table 67 in the statistical abstract, and far more non-Muslims SE Asians, the probability of a Muslim being a victim of a hate crime in any year is now at most 155/1000000 or 0.02%, or about the same as being killed in a car accident (50,000/300,000,000

For Muslims to be afraid of this is not rational, but understandable. The probability of a Mulsim being a victim of a hate crime is so small that--even though it is 5 times higher than 1997, it is essentially unchanged since 1997.

On a different note, Ms. Saudi treated others brutally--according to 12 witnesses. Frankly, I don't understand Ms. Saudi's actions at all. But I am not shocked that she could be injured by police, if she fought back, which it sounds like she did. Have you ever watched COPS? People who can't speak English aren't beat up; they're detained. How many people are arrested at WM and are not hurt? I'm sorry, but I don't think there's a tremedous conspiracy against this woman. Was she afraid to be a victim, so she fought back? I don't know.

Posted by Kevin at 3:57 PM

Former WM Regional VP Sentenced to Prison

WM is known for being an extremely tough, no nonsense client to its suppliers. Occassionally, a bastard slips through the cracks:

Clifford H. Pruitt Jr... has been sentenced to 16 months in prison for taking kickback payments....

Pruitt will also be on three years� supervised probation and must pay $56,500 in restitution and a $100 special assessment.

Pruitt pleaded guilty May 28, 2004...

Pruitt used his position at Wal-Mart to obtain kickbacks from some suppliers to Wal-Mart in his region.

Posted by Kevin at 3:36 PM

Coke and Pepsi Lose Market Share -- to WM!

Cott Corporation, a major private-label soda supplier to WM gains against the giants:

Toronto-based Cott, the biggest maker of private-label sodas and a major supplier to Wal-Mart Stores Inc and other big retailers, had another strong year. Its market share grew 0.8 percentage point to 5.5 per cent.

Posted by Kevin at 3:28 PM

March 4, 2005

Child Labor Settlement Investigation

Wal-Mart illegally let (or required?) dozens of teenagers use chainsaws and other "hazardous" equipment. The settlement with the Labor Department requires a 15-day notice before a Wage and Hour Division investigation can proceed. Some politicians want more money from WM, and others don't seem to like that a private entity will not be subject to immediate scrutiny at their whims:

WASHINGTON -- Connecticut lawmakers are pressing Labor Secretary Elaine Chao for more details about Wal-Mart's alleged violations of child labor laws, including those at 21 Connecticut stores.

In a letter to Chao Thursday, Democratic Sens. Christopher Dodd and Joe Lieberman also questioned the federal government's recent settlement with the retail chain, which requires the agency give Wal-Mart 15 days' notice before any investigation of any store.

It is news to me that all investigations must be delayed; I thought it was some

I cannot find the full text of the letter, and I should like to see that and all the settlement details. What the politicians don't seem to understand is that private organizations have rights under the law not to be subject to harrassment from them.

However, Labor blog has a screenshot of a DOL email sent to district offices. And one commenter notes the following editorial in the Miami Herald:

Most employers -- and unions -- are given advance notice of an inquiry so that they can assemble the necessary documents and personnel for review.

Even with complaint-driven audits of union finances, for example, it is not unusual for a large union to be given 30 days or more to prepare. This isn't for the benefit of the employer or union but to help our investigators do their work.

Anyone who thinks that Wal-Mart or any other employer or union would use the notice period to sweep evidence under the rug does not understand the law. Companies and unions have no incentive to try to hide the evidence because the penalty for most labor-law violations is a civil fine. Hiding or altering evidence of such misconduct is subject to federal criminal sanctions -- including possible jail time.

Posted by Kevin at 10:09 AM

Annual Dividend $0.60 per Share

Up 15% from last year.

The Board of Directors of Wal-Mart Stores Inc has approved an increase in the annual dividend to $0.60 per share, a 15.4% increase from the $0.52 per share paid during the previous fiscal year. For fiscal year ending January 31, 2006, the annual dividend of $0.60 per share will be paid in four quarterly installments of fifteen cents ($0.15) per share.

Based upon this announced increase, the Company plans to return more than $2.5 billion to its shareholders in the form of dividends this fiscal year. Wal-Mart has increased its dividend every year since its first declared dividend in March 1974.

Posted by Kevin at 9:56 AM

March 3, 2005

More in Canada

Being a mediocre blogger, I forgot to post this article from It looks like their will be another vote at a Canadian store, this one in Ontario:

Labor relations are again boiling for Wal-Mart (WMT:NYSE - news - research) in Canada, as workers at a store in Windsor, Ontario, will vote on whether to unionize as early as next week.

The United Food and Commercial Workers Canada (UFCW) said Wednesday it filed an application for certification with the Ontario Labor Relations Board, and an employee vote on whether to be represented by the union is likely to follow soon.

Posted by Bob at 2:05 PM

Feb Sales Better than Expected

Wal-Mart reports for February:

Wal-Mart said February same-store sales rose a better-than-expected 4.1% from a year ago, reflecting balanced strength at its flagship stores and Sam's Club.

The discount giant reported overall sales of $22.37 billion for the month, up 10.9% from a year ago. By segment, Wal-Mart Stores' overall sales rose 11.1% from a year ago to $15.13 billion, Sam's Club's overall sales rose 5.4% to $2.82 billion and international sales rose 14.4% to $4.41 billion.

The company had previously previewed a same-store sales increase of 4% for the month.

"For the March five-week period, we forecast comparative sales for the U.S. to be similar to or better than February," Wal-Mart said.

The stock added 48 cents to $52.52 in premarket trading

Posted by Bob at 2:00 PM

March 1, 2005

Undergoing Maintenance

ALP is currently undergoing maintenance.1 You might have difficulty loading pages for the next day or so. Sorry for the inconvenience.

UPDATE:Trackback fixed thanks to the wonderful Silflay Hraka.

1 In particular, Trackback is not functioning, and apparently hasn't been for some time. Working on a "fix" now.

Posted by Kevin at 3:27 PM