August 31, 2005

Concealed Carry

To serve their purposes, most concealed guns never have to be fired. Sometimes, they do:

ALBUQUERQUE (AP) - A fatal shooting at an Albuquerque Wal-Mart last week was the state's first by someone with a concealed-carry gun permit, authorities said.

Police said Felix Vigil was attacking his ex-wife with a knife near the store's deli counter where she worked when an armed customer intervened and shot him. The woman, Joyce Cordova, was treated for multiple stab wounds and later released from an Albuquerque hospital.

The armed customer, 72-year-old Due Moore, was interviewed after the shooting last Thursday and released.

Posted by Kevin at 4:53 PM

IKEA vs. Wal-mart

Spurred by Karol Boudreaux's comment, I decided to assemble a post about the lack of IKEA-hatred. Before we get started, let's look at the magnitude of the hatred. Right now, "I hate IKEA" turns up 766 Google hits, while "I hate Wal-Mart" turns up 7000, and "I hate Walmart" brings up 4000. That's 11,000 to 766, or 14 to 1 more hatred for Wal-Mart than IKEA (from English writers; I haven't tried Spanish, German, Swedish, or any other language). So IKEA-hatred is dwarfed by Wal-Mart hatred. Why?

Since Wal-Mart hatred doesn't have a simple economic explanation, the lack of IKEA-hatred shouldn't have one either. And since cultural explanations are notoriously fickle, everyone can come to some sensible position on their own. So here's mine:

First of all, in many places worldwide where a new IKEA has been proposed, there IS opposition by locals opposed to big-boxes in general, IKEA's not so good customer service, increased traffic around the site, etc -- just like opposition to Wal-Mart. (See, for instance, Red Hook). But IKEA opposition rarely brings out the organized interests.

It seems to me the primary reason is that IKEA's footprint in the US is small -- only 24 stores! Really (see map)! But they're in California, Chicago, Seattle, Houston, Dallas, and the Northeast bringing a European simplicity, exclusivity, and style to the "coastal elites" and other cosmopolitan types -- a combination of low-cost and internationalism not available in the rural, so-called red-states. In contrast, Wal-Mart is perceived by those self-same people as bringing "hick" values -- and garbage goods -- to big-cities.

(IKEA has only 216 stores and 84,000 employees worldwide. Wal-Mart has that many stores and employees in each of several US states [FL, TX]), and overall Wal-Mart has 25 times the number of stores, and 20 times the number of employees of IKEA.

Also, coroprate culture is important: IKEA has a culture of social democracy, and its executives will kow-tow to unions (Australia, Japan, France, the UK, Austria, ...) when it needs to; Wal-Mart has a culture founded in liberal democracy and fights to retain its independence, giving into the bare minimum of outside influence on worker-employer relations. WM extends and pushes its own value system wherever it goes internationally, while IKEA almost-happily melds with the local methods of the State. For some people, the distinction is subtle: Wal-Mart has everday low prices and always low prices; IKEA has a "low price but not at any price" vision.

That is not to say IKEA is an anti-Wal-Mart. Like Wal-Mart, IKEA is notorious for doing everything it can legally to lower its tax burden. It's also interesting that IKEA purchases 19% of its goods from China and 12% from Poland. Buy IKEA, so Chinese and Poles (and in exchange, Americans) work!

Posted by Kevin at 12:01 PM

Re: Handguns

Wal-Mart sells handguns in Alaska, but nowhere else:

No handguns are sold at our stores, except in Alaska, where customers who live in remote areas carry handguns to protect themselves from wildlife.
So big-city local officals who get assurances that Wal-Mart will not be selling "guns" are really getting assurances that hunting rifles and shotguns will not be sold.

Posted by Kevin at 11:34 AM

Mom & Pop vs. Wal-mart

There's a flash movie making the rounds, Mom & Pop vs. Wal-Mart, that I've been meaning to post about. I don't have a sense of humor for such things, especially the raw vulgarity, but many ALP readers have no such inhibitions.

To me, the most interesting part is the end, when Pop comments about people and things entering and leaving the newly remodeled Wal-Mart. The last thing he says is "Ohy, I hate my life," and puts his head in his hands and sobs away. What slice of the North American population does such a sentiment appeal to? The defeated and angry?

Anyway, the co-creator of the flash movie, Cathie Walker, wrote to me that the impetus for the movie was first and foremost that almost everybody on the production team (who make these things for a living) knew or knows somebody who had some problem with Wal-Mart.

Posted by Kevin at 9:56 AM

August 30, 2005


Last week, I asked Google News to include ALP, and their response was prompt, clear, concise, and negative:

Thank you for your note. We reviewed Always Low Prices but cannot add it to Google News because we currently only include sites with news articles that report on recent events. We appreciate your suggestion and will log the site for consideration should our guidelines change.
The decision not to include ALP is theirs to make, and I fully understand that ALP is not the Financial Times. But the given reasoning would seem to exclude most newspapers that perform any investigative journalism, since many political scandals are not "recent".

Posted by Kevin at 9:23 AM

August 26, 2005

11,000 Applicants for 400 Jobs (UPDATED)

UPDATE: NPR has an excellent piece on this.

In the San Fransisco Chronicle, Pia Sarkar finds people divided over whether 11,000 applicants for 400 jobs is a reflection of how bad Oakland's economy is, or whether Wal-Mart's jobs really aren't all that bad:

"Wal-Mart is one of the largest employers in the world -- they have to be a model for the society they are promoting," said Wendell Chin, coalition director for the Central Labor Council of Alameda County. "If they don't provide a decent lifestyle, it's scary....

Chin said jobs at Wal-Mart are a dead-end cycle that keeps people in poverty. Although he does not blame anyone for applying for work there, he said that Wal-Mart owes it to them to provide them a way to make a decent living.

"It's not just about jobs," Chin said. "It's (having) a good job that you can raise a family on."

For people like Melvin Brown, any job would be a blessing.

"I think this is a good place to work," said Brown, 52, who dropped off his application on Tuesday for an overnight maintenance position. "It seems like everybody gets along well with everybody."

Brown has been looking for a job for six months. He said he could live with the wages that Wal-Mart is offering.

"It's best to accept what you can get," he said. "You start low and aim high. First you gotta get your foot in the door."

Posted by Kevin at 1:11 PM

Is Culture Critical?

The Hartman Group's analyses are usually well thought-out and nicely written, if a little on the mystical side. Today's commentary is no exception. In Costco vs. Wal-Mart: Getting Beyond Utility, it claims that Costco has created a cult -- and that this cult gives Costco a long-term advantage:

Because it's precisely the factors that make a business a cult that will give it staying power in the long run. And in this business environment one of the factors that contributes to the cult status of Costco or Whole Foods is that when you scratch the surface you discover that, SURPRISE - it's possible. It's possible for human beings to run successful companies humanly, and maybe that's something a lot of people care about.
This is not a good versus evil debate, or whether one "model" is just, but about which type of company will be successful in the long run. And there is a pretty easy way to figure this out: look at the "culture" of companies that have succeeded and failed in the past.

I just took a short look myself, and found one answer to the question of which models, and which companies, are dominant in the long-run: NONE.

Of course, there are a large number of extremely successful and historically-long lived companies, but there are far more long-term failures than successes, and many newer businesses -- especially in retail -- can inflict some mighty big pain on the once dominant firms. Are those long-term successes -- Sears, Macy's, Hudson Bay, LL Bean, Modell's Sporting Goods, Hammacher Schlemmer, Walgreens (to name a few) -- are these companies that have created a "cult" following? Well, no. They have had ups and downs, but overall they have served their customers well through incredible changes in the marketplace, but there is no cult following them.

There are a large set of people -- me included -- who like clean, quiet, convenient, brightly lit stores that offer wide selction at low prices. But I don't give a fig about culture; I care about competence and courtesy (which is sorely lacking in the closest Target and Wal-Mart stores in my area). And I don't care if you did open your first shop in Williamsburg, VA in 1699 and paid your indentured servants a living wage.

So if Wal-Mart is lacking in this cult status, count me as unconvinced that devastation awaits Bentonville. But if cult status is so important, what does Wal-Mart have to fear?

On the other hand, Wal-Mart has zero mystique. It has adopted a model toward its customers, employees and investors that is based on pure rational calculation driven by the logic of market efficiency. They have been ruthless in running their business according to this logic, and they've been remarkably successful in doing so. The only thing is that if you live by the market, you die by the market. At some point customers, employees and investors might in their own ruthlessly calculating way decide that their involvement with Wal-Mart doesn't serve their interests anymore.
Well, it's also true that if you DON'T live by the market, you will die by the market. And one can honestly write , "At some point customers, employees and investors might in their own ruthlessly calculating way decide that their involvement with [X] doesn't serve their interests anymore", and put substitute your favorite anything for X.

Posted by Kevin at 11:04 AM

August 25, 2005

Chuck Schumer Comes Up Empty for Tupper Lake

On November 14, 2002, Charles Schumer, a U.S. Senator of the State of New York, wrote Lee Scott that Tupper Lake, the "Crossroads" of the Adirondacks, needed a Wal-Mart desperately, because the two closest stores -- both Ames department stores -- had closed when Ames went out of business.

To Schumer's political advantage, zip code 12986 was devoid of big boxes, and he could gain points by trying to do something about it:

Recently, Ames Department Store closed its retail stores in Tupper Lake and Saranac Lake, leaving the residents of southern Franklin and St. Lawerence Counties and western Essex County with no comparable retail establishment nearby. In fact, the closest alternative is the Wal-Mart in Plattsburgh, a full hour and twenty minutes away.
The citizenry were up in arms, of course, but Wal-Mart seems to have not even considered it.

As you can see from the map of Wal-mart locations around Tupper Lake, no Wal-Mart has been built within 50 miles of the town.


Tupper now has a WiseBuys instead of a Wal-Mart, and the chain provides an excellent example of creative destruction:

"WiseBuys was formed to proactively address the recent loss of Ames Department Stores throughout northern New York,” said WiseBuys Stores, Inc. founder Thomas Scozzafava. “Ames represented a vital retail destination in the larger, key shopping centers and filled an important role of providing a variety of affordably priced and much-needed merchandise. It is our goal to replace and expand on the concept of Ames.
Much, much more here.

Posted by Kevin at 10:47 AM

Wage Differential at WMW

Time and time again, I read about the different pay given to men at women by Wal-Mart. But what of its opponents? I had this to say on the Wal-Mart Watch blog post:

How much do the female employees of Wal-Mart Watch earn compared to their male colleagues?

It would be very interesting to see if the staff of WMW, Wake-Up-Wal-Mart, and the attorneys suing Wal-Mart shouldn't be the first to throw stones.

You may not like it, but differences in pay are pervasive in the American economy. In 2001, WM paid $9.55 an hour to full-time men, and $9.27 an hour to women. Women earned 97% of what men earned. That's a horrendous wage gap? No. We can infer from national data in this paper ($) that Wal-Mart outperforms the economy overall. The differential overall was about 75% in 1999, although the age breakout gives a more relevant comparison :


Even if Wal-Mart employed just 18-24 year olds, it would still have a better record than the average (and of course its small gap and large number of employees pulls up the average figure somewhat). Of course, this is just one look among many, and I welcome other slicing and dicing of the data; but it is pretty damn dishonest to slam Wal-Mart for it's wage gap without pointing out that it's pay structure is far more equal than a significantly large chunk of the rest of the economy.

Posted by Kevin at 10:08 AM

Wal-Mart for Teachers

WM's new site, Wal-Mart for Teachers, slipped in under my radar.

I think the NEA attempt to have teachers boycott Wal-Mart is a flop and a miserable public relations failure: not because the boycott has failed -- they expected it to fail -- but because a frenzy just never developed.

Failure or not, the call for a boycott was countered by Wal-Mart with a web site that permits teachers to speak for themselves, by providing details about Wal-Mart's philanthropy, and making it easy to send an original letter to the editor of local newspapers.

Nice. (Though telling readers which papers it is submitted to might be helpful).

Posted by Kevin at 8:25 AM

$2.5B in in 30 Year Bonds

Anybody have any idea what Wal-Mart planned to do with the $2.5 Billion in cash it received in its 30 year bond sale?

The bonds were expected to yield 0.87-0.89 more than treasuries, and Wal-Mart's bond rating was expected to hold at "Aa2" by Moody's and "AA" by S&P. It actually did a smidgin better than that:

Trading in the supermarket’s existing paper on Tuesday saw spreads creep in on its 2015 notes by 1bp to about 57bp over Treasuries, according to MarketAxess. But spreads on its 2030 bonds were unchanged at 83bp over Treasuries. The deal is being led by Lehman Brothers, Credit Suisse First Boston and JPMorgan.

Posted by Kevin at 8:15 AM

WM Workers Mourned

The two Wal-Mart associates shot by this apparent lunatic are being mourned by their families.

Posted by Kevin at 8:06 AM

August 24, 2005

Target Buys All the Ad Space in The New Yorker

Target has bought all the advertising space in one issue of The New Yorker. This seems odd, given the antipathy of (some/many) New Yorkers toward massive discount stores. Or is their antipathy only toward Wal-Mart as a symbol?

Target has purchased every advertisement in The New Yorker. At first glance, Target and The New Yorker seem like an odd match. (The last time Target pulled off the buy-every-ad gimmick, it was the sole sponsor of an issue of People.) Only recently did the "Bloomingdale's of the discount industry" vanquish Wal-Mart and Kmart to win the hearts and minds of the middlebrow. Moreover, when compared to the modish boutiques that usually advertise in the New Yorker, Target looks rather vulgar; there is no sign at the entrance of Louis Vuitton, for example, that reads "Welcome to Low Prices."

How will this strategy affect Wal-Mart? Will Target get an advantage by appealing to the middle-brow market of New Yorkers? We know from the past that Wal-Mart has been attempting to upgrade its image, in apparel especially, and so the image-reshaping is going on at both chains.

In a Christmas photo op, Michael Bloomberg was seen exiting a local Target clutching a George Foreman grill and a cheese grater, gifts that would surely please one of the gardeners at Gracie Mansion.

That, in a nutshell, is the story of Target's blossoming—making discount acceptable for the rich and famous, and, hence, everyone else. But the appeal Target holds in the minds of the upper crust does not end there. The rich (at least in Manhattan) profess to visit Target because of its social progressivism. Target, they insist, is a more enlightened corporate behemoth. Viewed through the Upper West Side prism in which "enlightened" equals "liberal," there is some truth to this contention. Sam Walton's heirs donate to the GOP, while Target scion Mark Dayton serves as a Democrat in the U.S. Senate. But because Target isn't as large as Wal-Mart means certain bugaboos (a nonunion shop, part-time workers without benefits) are more easily overlooked.

So the major problem with Wal-Mart (for Wal-Mart haters) is that it supports the Republicans and it is large. They will consider shopping at Target, however, even though Target has labour and import policies that are very similar to those of Wal-Mart.

My guess is that if the advertising by Target in The New Yorker works, however that might be defined and assessed, it will initially have the effect of stealing a bit of market share from Wal-Mart, but not much -- after all, what's to steal from Wal-Mart in Manhattan? But in the longer run, in this case perhaps only a few months, if middlebrow elitist-wannabes begin to set foot in Target, the effect might also be to increase the demand for goods at Wal-Mart as well. Once people get the taste of reasonable quality at very low prices, and once they realize that both large chains have similar labour and trade policies, they might be more likely to accept a Wal-Mart in their neightbourhood.

In other words, the effect of Target's buying all the advertising space in The New Yorker might be to let people know that it is okay for the middle and upper classes to shop at large discount chains.

Posted by TheEclecticEconoclast at 6:45 AM

August 23, 2005

"I mean, if you were going to steal something, would you steal manure?"

A couple forgot to pay $10 for 10 bags of steer manure. The local prosecutor drops criminal charges, but Wal-Mart pressed ahead and demanded civil damamges:

That could have been the end of the story, except for the letter from the world's largest retailer that soon arrived in their mailbox. It demanded $175 in civil damages from the couple.

That was when the Gastorfs learned about a little-known Oregon law that allows retailers to pursue civil penalties regardless of whether a person is found guilty or innocent of theft.

However, Wal-Mart had a change of heart:
However, Shardon Weber told the newspaper, "after researching the incident, we have decided to refund Mr. Gastorf the money that he has already paid.

"It simply seems like the right thing to do."

H/T: Chris Lindgren

Posted by Kevin at 9:22 AM

August 22, 2005

China and Corruption

Wal-Mart's quick expansion into China has led me to wonder how long they can go without using bribery and kickbacks, which are apparently pretty common among executives of American technology companies operating in China. (The article has nothing to do with Wal-Mart).

Posted by Kevin at 8:28 AM

August 21, 2005

Is ALP Anti-Walmart?

Some of you may get a kick out of how ALP is categorized on the right sidebar of the new Wake Up The NEA blog.


Frankly, I'm baffled, though I speculate the reader comments were the reason Agent Tim put ALP in that bucket.

UPDATE 9:40PM:That was fast; ALP is now in the pro-WM category.

Posted by Kevin at 9:07 PM

The Largest Distrbution Center

Traffic World has an article($$) which talks about Wal-Mart now having the largest distribution center devoted to a single company:

Wal-Mart Stores is not known for doing things in small degrees. When the world's largest retailer launched its new inbound distribution center outside Houston this summer, it opened a new front in its ambitious direct import strategy that reverberated far beyond the immediate area and likely will be felt well outside Wal- Mart's own operations.

At 4 million square feet, the complex in Baytown, Texas, about 25 miles from Houston, is the largest distribution center in the country devoted to a single company, logistics industry experts say.

It's a site so big - 18 football fields, by one measure - feeding a supply chain so large that the impact of boxes hitting the floor can be felt in the Panama Canal, at California ports and even across the Pacific Ocean.

This is part of an overall strategy to link imports with key distribution links:

"The sheer size of Wal-Mart, they have the ability to force changes in the industry," said Satish Jindel, president of the SJ Consulting Group, a Pittsburgh-based transport consultancy. "They're letting the people in (the ports of) L.A. and Long Beach know, 'You don't control how we bring shipments into this country.'"

"The strategy is not unique to Wal-Mart," said Steve Banker, supply chain service director at the Boston-based ARC Advisory Group. "But 4 million square feet, that's a big statement."


For Wal-Mart, the distribution center is part of a larger strategy to fine-tune its supply chain pipelines to match its sourcing from outside the United States with distribution to its sprawling network of stores in this country.

Under what Wal-Mart calls its "direct import" plan, more volume is being spread to defined gateways, including Charleston, S.C., Los Angeles-Long Beach and Houston, where goods are staged briefly before moving to regional warehouses closer to final transport to stores.

Wal-Mart would not comment for this story, but in announcing the award a major logistics contract for the Texas site to UTi Worldwide in February, Tim Yatsko, vice president of direct imports for Wal- Mart, said the facility "will serve our Central U.S. distribution centers as part of our expanding direct import network."

There are some other reasons Wal-Mart may expand this further besides the congestion at West Coast ports:

Labor should also take note, Jindel said. By selecting a right- to-work state for its biggest new distribution center, Wal-Mart is signaling it is ready to work around logjams created by labor problems. However, he said the company could be opening itself to a backlash if unions try to organize dockworkers and thousands of other employees expected to take jobs as the region develops.

Posted by Bob at 4:06 PM

Wal-Mart to Pay Fine

From WSJ Business Brief on 8/16:

Wal-Mart Stores Inc. will pay $1.15 million in a settlement with the Connecticut Department of Environmental Protection over alleged violations at 20 Wal-Mart stores and two Sam's Club locations in the state. The Bentonville, Ark., retail chain said it will pay $600,000 in civil penalties to cover violations that allegedly took place between 1996 and 2003. Wal-Mart also will contribute $500,000 to assist municipalities in addressing storm-water issues and $50,000 for environmental projects in the Connecticut River Watershed. A company spokesman said Wal-Mart has taken remedial action and addressed all of the issues that are cited, such as leaky dumpsters and trash-can compactors, or is in the process of addressing the issues.

Posted by Bob at 3:57 PM

Wal-Mart in Fuel Cell Trial

Cellex has press release on their trial at a Wal-Mart distribution center of fuel cell powered forklifts. They judged it a success:

Cellex Power Products, Inc. announced today the successful completion of its Alpha hydrogen fuel cell product field trials at the logistics subsidiary of Wal-Mart Stores, Inc. The highlight of the trial came with Wal-Mart deciding to lead the material handling industry by agreeing to support Cellex’s Beta field trials and commercialization process of fuel cell power systems for electric lift trucks.

Cellex had four fuel cell power units in operation for two weeks at a Wal-Mart food distribution center in Missouri demonstrating the operational benefits to Wal-Mart when powering their fleet of pallet trucks. The power units ran without safety incident and refueled with compressed hydrogen in one minute. Cellex’s Vice President Sales and Marketing, Tom Hoying commented, “This is a significant event as Wal-Mart’s continued support of Cellex will be a key driver in moving fuel cells from a demonstration technology to a commercial product in the material handling industry.”

Here's why this will improve porductivity:

Lead acid batteries used today typically last 4 to 8 hours and large distribution centers often change batteries over 300 times per day resulting in lost productivity and increased operational cost. Cellex’s fuel cell power units eliminate battery changing, run longer than batteries, maintain consistent power delivery to the lift truck and refuel in one minute.
Posted by Bob at 3:38 PM

Plain Plastic Bag

Remember, ALP is not affiliated with Wal-Mart. To celebrate that all-too-obvious fact, here's a photo of a plain plastic Wal-Mart bag.


Notice circled R's next to Wal-Mart and Always. That means these are registered trademarks. Also notice the small blurry SM next to ALWAYS LOW PRICES. It's not a circled R because the service mark for the shortened phrase "Always Low Prices" is not yet registered with the US Patent and Trademark Office, although it looks like "Always Low Prices -- Always." is finally through the opposition period.

Posted by Kevin at 3:08 PM

Storage Trailers

In many areas, Wal-Mart doesn't have the right to keep temporary buildings on its property, but it finds the additional storage valuable during the holiday season. This brings to mind a simple question: how much is the marginal storage trailer worth to Wal-Mart? Another: Should Wal-Mart pay for the right to keep storage trailers on its property during the holidays? If so, who should it pay. And, who does it pay?

The three Wal-Mart stores in Macon and Bibb County want to use up to 20 storage trailers at each location during the holiday season to store layaway merchandise.

The company is requesting conditional use permits for the temporary trailers at its stores at 1401 Gray Highway, 6020 Harrison Road and 5955 Zebulon Road.

Wal-Mart also is seeking permission to use a vacant Wal-Mart building at 2525 Pio Nono as an off-site warehouse.

Wal-Mart's violated the terms of approvals before, to unknown consequences.

Let me state at the outset that I don't know anything specific about the approval processes; I talk in general theoretical terms here, not specifics about any local government. I assume that real local governments will give thumbs-up or thumbs-down on these uses of property. But the exchange context is actually pretty interesting.

From the public-choice economic point of view, local regulatory bodies are not filled with impartial judges, but greedy utility maximizers. They know that the right to have trailers is NOT owned by Wal-Mart OR adjoining landowners, but instead is actually owned bythem, the land-use board members, who cannot profit directly from the sale or lease of such rights.

A Posnerian judge would decide this approval process based on maximization of net wealth: find out how much Wal-Mart benefits, and find out how much adjoining land-owners are affected by the storage units. The process should make sure that the benefit to Wal-Mart is greater than the harm to others, and the number/size of storage trailers permitted should maximize the difference.

How do planning boards actually rule on such matters? Some just give a green light, and others a red light, because of ideological reasons or political power of constituents. I presume that many try to minimize noise, and set workable rules for storage trailer use. More importantly, I think many will try to get funds from Wal-Mart for personal or public use. A tidy donation to the local school or charity would appear to benefit both local politicians and Wal-Mart. (I have no idea how much Wal-Mart contributes to the election drives of local politicians).

But notice who is not compensated: those who are potentially harmed, adjoining landowners. That the process cannot not be used to compensate landowners for harm imposed by Wal-Mart, but can be used to compensate politicians, is just something that we have to live with if we want political exchange to dominate market exchange.

Posted by Kevin at 10:23 AM

2 or 3 times a day

From the mouth of a Wal-Mart shopper:

Bari Roy, a Westwood resident, said Friday she’ll be making frequent stops at the new Wal-Mart [in Ashland, KY]. “It’s (almost) in my back yard,” she said. “If Wal-Mart doesn’t have it, I don’t need it. I go to Wal-Mart at least once a day, sometimes two or three times a day.”

Posted by Kevin at 10:19 AM

Always the Lowest Prices in the UK?

Wal-Mart doesn't always have the lowest prices in the U.S., and Asda is not always Britain's lowest price supermarket, and it must not say so in its ads, since a single basket of 33 goods used to buttress the lowest price claim is not representative of the tens of thousands of goods sold by supermarkets in the UK.

Posted by Kevin at 10:08 AM

Truckers Legal Hours Increased

The Bush Administration has decided to extend legal trucker hours. There are two relevant changes:

For 60 years, truckers could drive for 10 consecutive hours. On Jan. 1, 2004, the Federal Motor Carrier Safety Administration changed the rule to allow them another hour behind the wheel.

A federal court, however, threw out the changes.

On Friday, the truck-safety agency announced that a revision to the rule would still allow the big rigs to roll for 11 hours, three hours more than safety advocates say they should.


The Bush administration also announced a new set of rules for truck drivers who travel less than 150 miles in a day and don’t need a commercial driver’s license.

Those drivers, who typically work for retailers and small package-delivery companies, would be partially exempt from the 14-hour workday. For two days a week, they could work 16-hour days, including breaks.

Wal-Mart and other retailers have lobbied Congress to extend the workday for truckers to 16 hours, something labor unions and safety advocates say would make roadways more dangerous for all drivers.

Some members of Congress had a similar proposal, but the legislation was withdrawn in March when safety advocates and unions representing truckers opposed it.

As noted before, truckers themselves have a mixed opinion on the matter.

I'm not sure how they came to this figure, or if they did a cost-benefits analysis:

She said the rule, which will take effect Oct. 1, will cost long-haul trucking companies $10 million and save short-haul companies $280 million.
How much will Wal-Mart profit? How much will consumers save?

Posted by Kevin at 9:54 AM

Round Lake Beach

Applied commonsense can be dangerous sometimes; but I don't see what else these consultants could have used when assessing the impact of the new Wal-Mart Supercenter to replace the old WM in Round Lake Beach:

A proposed Wal-Mart super center in Round Lake Beach could make life difficult for one or two local retailers, according to a retail analyst.

The new store, targeted for Route 83 and Monaville Road, will offer a full-service grocery and general merchandise and will likely siphon off customers from the Jewel, Dominick's and Cub Foods stores clustered around the intersection of Rollins Road and Route 83, said John C. Melaniphy, president of Melaniphy & Associates Inc., a Chicago-based retail consultant.

"The super center is going to hurt the supermarkets (because of) Wal-Mart's ability to operate at a cost level so much below everyone else," he said.

Melaniphy's prediction for the Super K-Mart on Rollins Road was even more dire.

"It's going to be history. I'm surprised it's still open," he said. "It's not going to stay a super center."

Mr. Melaniphy lists Wal-Mart on his client page, which is not surprising, as he admits it even when making a hefty charge against Wal-Mart while discussing big-box replacement:
Additional problems arise when a major Big Box like Wal-Mart or Big K relocates and restricts the types of stores that can go into the vacant space. In one instance in which I was involved, Wal-Mart owned their store in a mall and would not permit another major Big Box retailer to take the space.
I'd really love to see the calculations by Wal-Mart executives which demonstrate the profitability of deterring entry from competitors, given that an old store will remain empty.

Posted by Kevin at 9:27 AM

NPR on Teacher Boycott and Job Creation

Excellent audio stories from NPR.

Frank Langfitt discusses the teacher boycott on All Things Considered.

Also, here's a discussion with Greg LeRoy about his new book The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation. The skinny: tax breaks are a small portion of business cost, but are a large chunk of revenue lost to local governments. The interview doesn't even touch on Wal-Mart, but it's critical to understand the role and size of tax subsidies doled out by politicians to other companies, to understand the size and impact of Wal-Mart's feeding at the trough.

Posted by Kevin at 9:24 AM

August 19, 2005

Not Funny

This rumor has become a form of domestic terrorism:

Police and Wal-Mart officials say rumors that a mother and small child will be killed at Wilson's Wal-Mart Super Center are a localized version of a rumor circulating in North Carolina and other parts of the country.

Sharon Webber, a spokeswoman for Wal-Mart Stores Inc. in Bentonville, Ark., said the same rumor has popped up around multiple stores throughout the country. The corporation is working with law enforcement agencies to investigate the rumor.

"We take every threat seriously," Webber said. "... But at this time, it does appear to be an urban legend."

Snopes traces it back to July in Tennessee:
While the "mother and small child murdered at a Wal-Mart" version is the one circulating in e-mail, another form that the rumor has taken asserts in a more generalized fashion that a woman and a child are to be hurt or killed at a mall or shopping center as part of a gang initiation.

Posted by Kevin at 5:28 PM

Newborn Found in Wal-Mart Bathroom (UPDATED)

This leaves me speechless:

MACON, Ga. -- A woman could face charges after her full-term baby was found in a Wal-Mart bathroom toilet, covered in trash and toilet paper.

The newborn girl was found Sunday afternoon by three Wal-Mart employees. A customer started CPR until a fire department worker arrived and revived the baby, according to a police report.

UPDATE: The baby has died:

A baby girl Bibb County authorities say was born in a Macon Wal-Mart bathroom Sunday died today after more than five days on life support.

Charges against the infant's mother, Amy Dianne Shorter, 26, held in the county jail for aggravated assault and first degree child cruelty, will be upgraded to murder, said Bibb Sheriff's spokesman Capt. David Davis.

Posted by Kevin at 5:27 PM

Hootie, the Blowfish, and Wal-Mart

Via Fark, we have another case of Wal-Mart's power in the music industry:

JACKSONVILLE, FL -- Hootie and the Blowfish fans got to see the band play at a local Wal-Mart Supercenter. The band made an appearance to sign autographs at the Wal-Mart Supercenter on Atlantic and Kernan Boulevards around noon today

Posted by Kevin at 5:09 PM

WM & Target Pushing "Back to College" Chic

Even more evidence that the college dorm decoration craze belies the oft-repeated claim that college is getting too-expensive. Even Wal-Mart is pushing stylish dorm furniture, including a sleek "city-style" IKEA-flavored futon.


Perhaps they are just trying to match Target's offering:


At $150, Wal-Mart's futon is $20 cheaper than Target's.

UPDATE: Well, IKEA has a $160 futon which is, well, different:


I like the way Wal-Mart's futon looks best, but you'd have to try sleeping on it for a complete evaluation, no?

Posted by Kevin at 1:55 PM

Garth Brooks at Wal-Mart Only

Wal-Mart is now the monopoly supplier of Garth Brooks, except for the used market of course:

Garth Brooks has signed a multi-year, exclusive pact with Wal-Mart, making the retailer and its Sam's Clubs and outlets the only places where his music will be commercially available.

The deal with Brooks marks the first time an artist -- and certainly a superstar -- has aligned himself and his entire catalog with one chain. (A number of other retailers have started labels, but they were never exclusive to the retailer and most have shut down).

However, it will be a very strange form of monopoly, as I gather output wil not be restricted, and prices will actually be lower...

Posted by Kevin at 7:33 AM

Union Network International

The Guardian notes potential international unionization efforts:

The fight to unionise Wal-Mart workers will shift to a new front next week when union leaders meet to discuss plans for organising employees in countries including Britain, Brazil, Argentina and Germany.

Forming a strategy will take centre stage at the annual congress of the Union Network International (UNI) in Chicago, a federation based in Europe that represents 15 million workers around the world.

Wal-Mart is the world's largest employer with 1.6 million workers and has become a focus for trade unions. In Britain it owns the Asda chain, which has recently had a skirmish with workers at a distribution centre in the north-east.

For the gazillionth time, Wal-Mart is NOT "the world's largest employer", regardless of your feelings on the matter.

UPDATE: Here's more from Reuters.

Posted by Kevin at 7:25 AM

Wal-Mart's Husband Store (Humor)

ChronWatch has an amusing tale about Wal-Mart's new Husband Store:

A Wal-Mart store that sells husbands has just opened in Dallas, TX, where a woman may go to choose a husband from among many men. The store is comprised of 6 floors, and the men increase in positive attributes as the shopper ascends the flights. There is however, a catch. As you open the door to any floor, you may choose a man from that floor, but if you go up a floor, you cannot go back down except to exit the building....

Posted by Kevin at 7:23 AM

August 17, 2005

Wal-Mart's Data

When surpassing expectations is not enough:

LITTLE ROCK, Ark. -- Wal-Mart Stores Inc. said yesterday that its second-quarter profit rose 5.8 percent, beating Wall Street expectations. But revenue fell short of forecasts as its customers continue to struggle with higher gasoline prices.

For the three months ended July 31, the Bentonville-based Wal-Mart earned $2.8 billion, or 67 cents per share, up from $2.65 billion, or 62 cents per share, in the same quarter a year before. The company reported sales of $76.8 billion for the quarter, up 10.2 percent.

Shares of the Dow industrial company fell $1.53, or 3.1 percent, to $47.57...

Still, the impact of higher energy prices is not linear, and those who have hedged against them, or have leaner operations, can gobble up more market share:
Wal-Mart's chief financial officer, Thomas M. Schoewe, said utility expenses rose $100 million and fuel costs were up $30 million in the quarter.

Still, the case can be made that Wal-Mart's dogged low-price model helps it run counter to economic cycles - making it a more compelling spending destination for consumers with tight budgets.

Also interesting, perhaps best seen in the light of people not making wild extrapolations from marginally useful data, is the end of the weekly sales reports:
Wal-Mart also announced yesterday that starting in February it will switch from its schedule of weekly sales updates to a quarterly report providing guidance on earnings and sales.

"The weekly updates were a little tedious and not terribly relevant," said Todd Slater, an analyst at Lazard. "They generally don't measure trends very well."

Good news for ALP is that The New York Times apparently believes that Wal-Mart's trademark is "every day low prices", not "always low prices":

The company aggressively squeezes suppliers and wields its overseas buying power to pass on its trademark "every day low prices" to consumers.

Posted by Kevin at 1:55 PM

August 16, 2005

Seiyu to Open WM Branded Stores in Japan

Count me as skeptical of the effectiveness of the new stores:

TOKYO (AFX) - Seiyu Ltd will start opening stores in 2006 developed with Wal-Mart Stores Inc, its top shareholder, and carrying the US retail group's brand, The Nihon Keizai Shimbun reported without citing sources.

By introducing the store development methods of Wal-Mart, its 42.4 pct shareholder, Seiyu aims to turn around its business, the business daily said.

Wal-Mart plans to turn the struggling Japanese retailer into a subsidiary as early as this year.

Posted by Kevin at 9:43 PM

Jihad of the Left against Wal-Mart?

Phillip Mella, Mayor Pro Tem of Woodland, Colorado, says,

The irony of the jihad against Wal-Mart by liberal activists and their brethren in the labor unions is that if they're successful in leveraging higher wages and benefits for workers it will be on the backs of the lower class, their natural constituency, who will be obliged to pay higher prices ("Labor Tries Political Tack Against Wal-Mart," Business column, Aug. 10).

As a city councilman I recently spent several months fighting a small but vociferous group of zealots bent upon stopping Wal-Mart from building in town. This latest movement against a highly successful corporation is driven by the same brand of anticapitalist ideologues who are determined to rekindle the failed socialist ideals that were in fashion in the 1930s. The complaint that Wal-Mart doesn't reward its workers is a tiresome canard. The average hourly wage for new workers is $9.13, which, in our town, is about 25% higher than average entry-level retail wages. Further, Wal-Mart offers reasonably priced, basic health care to all employees.

More critically, Wal-Mart provides entry-level work for relatively low-skilled individuals who might otherwise never get the chance to demonstrate skills that are crucial to moving up the employment ladder.
Is it any wonder that nearly 70% of Wal-Mart managers began as front-line workers?

This effort is, indeed, "the last gasp of a dying labor movement," because, not unlike the Democratic Party in the last election, they have fundamentally misread the mainstream Americans who pack Wal-Mart stores each week because the company offers them and their families real value for their hard-earned money.
In contrast to these elitist social engineers, consumers understand the core American values of free enterprise and choice in the marketplace.

This was in a letter to the Wall Street Journal ($); it is the sixth letter down in the list. Thanks to Phil Miller for the information.

Posted by TheEclecticEconoclast at 5:48 PM

August 15, 2005

Power Outage Makes WM a Short-Term Prison

Let's put this one in the lawsuits category, until further notice.

On Ask Metafilter, Lady Bonita tells us of not being permitted to leave Wal-Mart for 20 minutes after a power outage at 10PM at her local Wal-Mart Supercenter:

We were escorted (herded?) with flashlights to the front of the building and told we couldn't leave until power was restored . Babies and kids (including mine) were scared and crying and there was a lot of general confusion. Reason we weren't allowed to leave? They wanted to make sure we weren't stealing anything. Eventually, after 20 minutes or so, when it was obvious the power wasn't going to quickly be restored, they let us leave. After checking us over with flashlights.

What I want to know is if they had any right to do this? Were we being held hostage, kidnapped, falsely imprisioned? And how the hell could I have gotten out of there if they had insisted we stay any longer?

I'm no criminal lawyer, and have no competency to discuss the right and wrong of the conduct of Wal-Mart associates. But I think if they had let people leave, and something had happened to somebody, they would be subject to severe civil penalty.

(Thanks to this commenter for kindly linking to ALP).

Posted by Kevin at 10:34 PM

Bavarian Wal-Mart

I'm hoping the folks at The Box Tank will post some photos or drawings of this store:

Swap Frankenmuth's Bavarian emblems of beer steins and bratwurst for windmills and wooden shoes, and you've got Pella, Iowa.

The Dutch-themed tourist town settled in 1847 -- two years after Frankenmuth -- similarly prides itself on its agricultural roots and storied European heritage.

So when Wal-Mart came a-knocking this year, Pella officials were leery of the big-box behemoth clashing with their Holland-themed haven.

But after careful review of the city's ordinances, Planning Commission members gave the 99,700-square-foot supercenter the green light in April.

"In Pella, the approach with the zoning ordinance is not to prohibit big-box development," said Planning and Zoning Director George J. Wesselhoft, "but rather make it distinctive so it doesn't resemble 'Anytown USA' architecture...."

Pella officials OK'd the rezoning after Wal-Mart agreed to adhere to a Netherlander architectural design, including burgundy and cream shutters, a green sign, trees, extended sidewalks and a Dutch gable over the entrance.

Posted by Kevin at 5:38 PM

US of WM

Kerry Hannon has an interesting review of John Dicker's The United States of Wal-Mart in USA Today. The skinny:

Cheap is our new crack cocaine.
This is a perfect summary, from what I've read so far of the book.

Posted by Kevin at 5:33 PM

Wal-Mart No Way

Wal-Mart No Way bills itself as a group of mostly Brooklyn locals who are concerned with the social impact Wal-Mart will have on their neighborhoods:

We're a group of friends and neighbors, mostly from Brooklyn, who are appalled by Wal-Mart's push to locate stores all over New York City. Everybody involved with our campaign is a volunteer � we're really stretching to make campaign activities happen.
Sounds like your normal anti-Wal-Mart group, and as far as I can tell, it is, although I cannot tell how large the group is.

But in addition to being sincere about their concerns, they were co-founded by Peter Sikora, who looks to me like a professional activist (not that there's anything wrong with that).

Mr. Sikora, who registered WMNW's domain name as is the organization's "Executive Director", is a Brooklyn local, but according to the New York Daily News used to work as public health advocate (and alternatively, as coordinator of Campaign to End Sweatshops, and many other positions) for the New York Public Interest Research Group. (If you don't like Wal-Mart's business practices, you can at least compare them to their critics' revenue generating processes; Wal-Mart doesn't tack on fees to college tuition bills, unlike many state PIRGs do -- " On about 1/3 of the state college campuses in New York State, a student's PIRG contribution is mandatory and nonrefundable. ").

Let me stress that there's nothing wrong with activism. It's perfectly fine as it goes. Everybody believes in something, but activists believe in things a lot more strongly than non-activists do.

That Wal-Mart No Way opposes Wal-Mart says little or nothing about whether "New York City" or "Brooklyn" or "the community" is fighting back, regardless of what they, Wake-Up Wal-Mart, or The Brooklyn Papers would like you to believe.

The group is new, but now brand new, as it was already in place protesting in February, and it seems have an inactive Google Group.

Let's set Wal-Mart No Way aside for a minute, and focus on local organizations that purport to support Wal-Mart's entry into a region. These can be either truly grass-roots, or somehow aided and abetted by Wal-Mart. When Wal-Mart places its people and resources are at the center of such an organization, we can rightly question the integrity and representativeness of the organization. Wal-Mart's professional lobbying team in DC and their PR folk around the country are directly serving particular interests, and Wal-Mart opponents would argue that the essential character of any pro-Wal-Mart group approved by Wal-Mart is almost corrupted and fraudulent.

I'd say that the same holds true for any group that opposes Wal-Mart. People are the same everywhere, and the social organizations they form, regardless of social aim, form the same type of networks and patterns. Genuine spontaneous, atomistic, individual concern about Wal-Mart's impact on a mass scale would be real, grassroots activism. But it appears to me that this "ideal" is not what we have with Wake-Up-Wal-Mart and Wal-Mart Watch. (I don't know enough about Wal-Mart no Way to make any solid judgment about them). Let's assume the latter truly is grassroots and local: what happens to the integrity of the organization when anti-Wal-Mart forces infuse their people, knowledge, and financial resources into it?

My general question is, can a corps of experienced activists actually lead or manage a grassroots campaign, or are their efforts necessarily corrupted by their experience?

Posted by Kevin at 4:33 PM

Sad but Almost True

Responding to teachers' unions pleas for the back-to-school crowd to boycott Wal-Mart, a commenter on Joanne Jacobs' blog laments Wal-Mart's low wages, while trying to figure out why a teachers' union should care about Wal-Mart:

Maybe the teacher's union figures Wal-Mart is about the best a public school graduate will be to do when they graduate. Also, many school teachers work part-time at Wal-Mart. If Wal-Mart paid better and had better benefits the teachers could quite working in the schools and just work at Wal-Mart full time.

Posted by Kevin at 2:33 PM

August 12, 2005

Wal-Mart Hiring Center

A cute look into a Wal-Mart war room hiring center in Boyertown, PA:

Since July 26, the hiring center has been in full swing, full momentum, trying to flesh out its roster for the Oct. 26 grand opening. To properly outfit the store's shelves, aisles, and departments with the appropriate merchandise - from tires to frozen turkeys - Wal-Mart will need to hire its 300 to 400 staff by the September date.

"It's a pretty frantic operation," describes John Mchugh, store manager for Bethlehem's Super Wal-Mart who will helm Boyertown's in the fall. "We need
to get everyone trained and ready to go." Training will be supervised by a management team of nearly a dozen.

The people applying for jobs include a recent high school grad, a poor college student, and two men in automotive school.

Hmmmm... Why are thsee people applying to Wal-Mart when the jobs are allegedly so poor paying? No alternatives, you say, so Wal-Mart is their best alternative? Well, no, look at the list some of the local alternatives:

1) Cabot Supermetals is paying $16-$21 per hour for those with experience in a chemical manufacturing environment.

2) Early Intervention teachers with high school graduation and 3 years of childcare expeirence required. $8.50 an hour.

3) SEWING MACH. OPER & ASSEMBLERS - l Boyertown Co. l 1st shift 7 am - 3:30 pm l $8 - $9/ hr. l Exp Req.

4) Truck Mechanic Exp. necessary $21-$25hr depending on exp. Co. paid bnfts, KOP area shop. Day shift. CDL & insp. lic. a plus.

5) Construction Laborers $9.47/hr. FT w/benefits. Concrete/Carpentry/ Mechanical exp. helpful. E.O.E. Drug test required.

6) Home Health/ Home Care Aide... Wide variety of duties including personal care assistance, housekeeping, activities, opportunities on all shifts. No certification required. Start wage $8.50 _ attendance bonus + insurance +vacation + 401k + sick leave.

7) DOCKWORKERS PJAX, INC part time dockworkers to load/unload trucks. 2nd shift available. New starting p/t rate $11.50/hr; f/t $12.50/hr. Forklift experience preferred.

8) Line Cooks Full service, casual resturant seeking FT kit. help. $10-$12 per hr. PT/FT avail. All shifts.

9) Production Workers Needed for sheet metal shop, 1st shift turret press operator. Heavy lifting reqd. Good math apptitude & the ability to read tape measurer Up to $14.45 per hr

10) LIFEGUARDS for apt complex pool $10/hr

11) Assistant Bookkeeper 12-month position. Position requirements: post high school business education and/or three to five (3-5) years related business experience; Knowledge of payroll procedures as related to salaries; fringe benefits; federal and state withholdings; accounts payable; and financial record keeping; strong computer experience with emphasis in Excel applications. Position responsibilities include strong communication skills in working with district-wide personnel, high degree of professionalism and confidentiality. Position is hourly, support staff, full benefits coverage, $19.55 per hour.

Search outside of Boyertown, and the list goes on and on, and those are the jobs that actually put the offered wages in the classified ad...

Given this information, how much should Wal-Mart pay a high school graduate with no experience? And a part-time college student?

Posted by Kevin at 3:51 PM

August 11, 2005

Teachers' Union Opposed to Wal-Mart;
Another Argument in Favour of Home-Schooling

From Kip Esquire's Blog, A Stitch in Time:

If this is what some teachers are doing outside the classroom...

The 2.7 million-member National Education Association, the biggest U.S. union, and the 1.3 million-member American Federation of Teachers is teaming with the United Food and Commercial Workers in urging shoppers to stay away from the world's largest retailer and buy school supplies elsewhere, a release from the food workers' "Wake-Up Wal-Mart" group said.

The back-to-school season is the biggest shopping time for Wal-Mart other than Christmas. The unions held news conferences and rallies across the United States on Wednesday, demanding the company boost its wages, expand health benefits and adhere to child-labor laws.

...then can you imagine what they're doing inside the classroom?

Another good reason to home-school your kids.

Posted by TheEclecticEconoclast at 10:23 PM

Sampling for Country of Origin

On a Motley Fool forum, Shelbyboy is inviting us to undertake a distributed, nonrandomized survey (rr) of the country of origin of Wal-Mart goods:

I think it would be interesting to conduct a non-scientific random survey of products in a Wal-Mart Super Center to see where they are manufactured.

To that end, I'm proposing a group effort.

This is a great idea, and very interesting (I'd also write down the prices). But it may or may not be reliable. If they could get 20 people to count each department in different stores across the US, and then aggregate the results, I might believe the data are reliable.

But if one person is doing the analysis in one store, and if he breaks apart the Wal-Mart universe by department, he's still left with the problem of how to select goods within each department in an unbiased fashion. Since it has little formal layout, and an unavoidable bias to counting the goods most accessible, which might be correlated with country of origin, the "pick the first X" sampling method is not sufficiently randomized, yielding potentially useless and misleading results.

So how can we construct a reliable survey for one person/group to undertake in one store? In order to do this right, we would need a frame (a list that covers all goods sold in Wal-mart), from which the sampled items will be chosen in some systematic but random way.

Since a list of all individual products is not available, we could cluster-sample:, i.e. layout the floorplan of an entire store in a M-by-N sized grid, and randomly select K grid spots, counting ALL of the items in each grid. To ensure good coverage of all departments, we could require that all regions be included by at least one of the K spots.

(Note that this method will probably ignore services sold by Wal-Mart, like oil changes and vision testing, and will does not include gasoline, newspapers, and any items with no "Made in ..." label).

As you can guess, this process would be very difficult and time consuming, but it would be hard for me to accept seriously the results of a country-counting survey.

Posted by Kevin at 11:12 AM

August 10, 2005

Data Warehousing

Here's a very interesting (though, if you believe the footer, supposedly "CONFIDENTIAL") powerpoint presentation by Harrold L Correll, Strategic Applications Architect of Wal-Mart's Data Warehouse Team.

Best factoid: Wal-Mart sells 155,520,000 items daily.

Please note that ALP is providing a link to the presentation; it is not storing or providing a local copy, and has had no hand in its release. Should it be taken off the web, I cannot provide you with a copy. You can find it yourself by searching Google for "wal-mart stores database". It's the top search result.

Posted by Kevin at 10:44 AM

Don't Shrug off Wake-Up Wal-Mart

Alan Murray writes that Wake-Up Wal-Mart is not to be ignored:

Shrugging off "Wake-Up Wal-Mart" would be a mistake, for two reasons. First, the breakup of organized labor may have a rejuvenating effect on unions like the UFCW, which will need to show success. Just as competition sharpens the focus of business, it is likely to do the same for labor.

Second, the new campaign marks a sharp change in strategy for organized labor -- one that could increase its effectiveness. The unions have been losing on the shop floor for decades, and in recent years, their political clout has waned as well. Now they are borrowing a page from media-and-Internet-savvy groups that have scored surprising David-and-Goliath successes by attacking companies where they are most vulnerable: their public reputations. Whether it is Greenpeace going after the oil companies, M�decins Sans Fronti�res targeting pharmaceutical companies or the Rainforest Action Network banging on big banks, these scrappy "nongovernmental organizations" have shown that big, global corporations will go to surprising lengths to keep their images clean. The unions hope Wal-Mart will do the same.

Posted by Kevin at 12:19 AM

August 9, 2005

Dukes vs. Wal-Mart Class Action Appeal

The full audio of Wal-Mart's appeal yesterday is available online [57 minutes, 8.7MB] on the US Court of Appeals for the Ninth Circuit.

It starts off with a discussion of regression analysis, the law of large numbers, and the meaninglessness of statistical significance! The judges were independent and harsh to both the defendant and plaintiff lawyers. Both lawyers sounded smart but nervous.

One of the judges stated twice that, "Wal-Mart has a national policy of not having a national policy." Mr. Seligman noted that Wal-Mart's culture is broad and uniform, so that the absence of a formal national policy doesn't really matter.

One judge analogized the hiring of law clerks to the hiring of Wal-Mart managers: in both, subjective criteria dominates. "It may be that judges like the rest of humans have various stereotypes..."

Mr. Seligman was extremely effective, until he stated that Wal-Mart was not precluded in the damage phase from bringing up store-level pay variances. (Women should not be given damages if men were paid less than women in that store. [Ed: Shouldn't men get damages in that case? -- Well, yes.]). And his failure to be able to cite pages in the record during his oral arguments was bizarre.

Marketwatch thinks one judge gave WM sympathy:

If over 90% of stores show no disparity in pay, "that suggests to me if you look at the stores as a large group, you just don't find evidence of sex discrimination," Judge Andrew Kleinfeld as he questioned Boutrous.

Kleinfeld also indicated he had difficulty inferring discrimination from Wal-Mart's policy of giving local managers discretion for promoting employees.

"I have trouble with getting from there to sex discrimination," he said

But the SF Chronicle disagrees:

But the retailing giant got little apparent sympathy from a three-member federal appeals court.

The 45-minute hearing before the Ninth U.S. Circuit Court of Appeals in San Francisco was critical to the future of the suit, which claims the company had a systematic bias against women in pay and promotions. The court took the case under submission and gave no hint of when it might rule.

Posted by Kevin at 3:30 PM

Radioeconomics PodCast

James Reese gets me to make off-the-cuff remarks about my dissertation, T&B, ALP, and RAND in his most recent podcast at Radioeconomics. Much of the latter half of the discussion is about Wal-Mart, although it will be nothing new to regular ALP readers.

Posted by Kevin at 2:33 PM

$500 Voucher Scam

People are being robbed by telephone scammers falsely claiming to be from Wal-Mart:

Local consumers are getting phone calls from telemarketers who claim to be from Wal-Mart. The telemarketers offer $500 in shopping vouchers. Consumers are told in order to receive the gift cards they must pay $4.99 for shipping and handling. The caller then asks for the consumer's personal checking accounty number and more than $4.99 is taken out of the consumer's account.

Wal-Mart has received thousands of calls from all over the U. S. about this telemarketing scam. There is a similar scam going around using the Home Depot name. The telemarketing calls are reportedly coming from the Consumer Rewards Network, a company that has an "F" rating with the Better Business Bureau in California.

Here's one woman's story; state governments are aware of the scam...

Posted by Kevin at 10:27 AM

Leaving the South

In Medias Res is leaving the South, where the diverse masses attracted by Wal-Mart's low prices make some white bigots uncomfortable:

And not all the stereotypes are so comparatively light-hearted: until we moved to the South, we never imagined we'd meet someone who could say, without the slightest embarrassment, that she doesn't shop at the local Wal-Mart because so many black people shop there also. Heaven knows we won't miss that.

Posted by Kevin at 10:16 AM

Downtown Without Big Boxes

At BoomtownUSA, Jack Schultz has some evenhanded comments about the actual effects of banning big boxes on downtowns:

I related my own experience of strolling around Ellensburg�s downtown early in the morning and not finding a place to get a cup of coffee or a newspaper. I was disappointed to see over a dozen vacant buildings in the downtown. Obviously banning big boxes hadn�t led to a boom in the downtown area. I also was shocked to find their only big box store closed early in the morning. Without competition, they obviously didn�t see the need to be open at odd hours.

Ellensburg has a wonderful potential with their downtown area. It is historic, with wonderful brick and stone buildings. It should be a magnet for the community. It should be an entertainment center with people living in the lofts above the retail shops. But, it won�t become such a place by trying to stifle competition, keeping the big boxes out of the county. It will do so by finding its own niche, building it and developing its own special sense of place.

What he said.

Posted by Kevin at 10:05 AM

August 8, 2005

A Different Perspective

MacLeans offers a different perspective than one normally reads about when Wal-Mart is the topic. I find this quote particularly interesting:

The plight of Robertson's own union illustrates why. Over the past three years, his local has lost 3,000 members -- a decline of more than 10 per cent -- and he says Wal-Mart is the number 1 reason for it. Unionized stores have had to cut staff and wages to compete, and other companies have increased efforts to prevent unionization.

The UFCW's membership crisis is but one example of a larger trend unfolding throughout the continent, as traditionally union-heavy industrial companies downsize, and as mostly non-union sectors like services, technology and retail become a much larger portion of the economy. The same phenomenon is happening in Canada, where private sector unionization has fallen from 26 per cent in the early 1970s to just 18 per cent in 2003. In short, organized labour is dying a slow death and its financial strength and political influence are waning as a result.

The fight over Wal-Mart is really a fight to halt organized labour's gradual death spiral. If the unions are to turn the tide, they need to be in retail, and if they are going to get into retail, they have to get into Wal-Mart -- union leaders themselves acknowledge as much. As Stuart Acuff, organizing director of the AFL-CIO, America's umbrella organization for trade unions, told Fortune last year, "If we want to survive, labour has no choice but to organize Wal-Mart."

I have been meaning to look more closely at grocery employment across the country. It would seem that organized labor's struggles in the grocery business began long before Wal-Mart ever began selling produce and Fruit Loops. I first noticed this by chance in my local grocery store that there were only a few check out lines open anymore. This is, of course, becuase technology has been added over the years to speed up the process.

There was a time when paying higher wages meant faster checkouts and more sales. When everything was done by hand somebody with a good memory would be able remember prices and codes. Scanners have made smarter people less necessary. They are simply being replaced by machines. Anectdotally, my impression is that a fair amount of grocery workers could find employment at equal or higher pay than their union wages. In my local Wal-Mart, a fair amount of the people I wouldn't say the same thing( and note the word some, I generally find people at WM to be good. it's one of the reasons I like to shop there, but I have run across some I wonder how they managed to get a job). This doesn't mean this is true across the country as some people live in towns with limited employment opportunities and I'm talking about L.A.

Posted by Bob at 11:19 PM

WM Asks for the Class to be Disbanded

As expected, Wal-Mart will today ask that the sex discrimination class be broken apart:

The report said that if the order is upheld, Wal-Mart could face a lengthy court battle or, more likely, would pursue a settlement that by some estimates could cost the retailer billions of dollars.

On the other hand, the Journal cited legal experts who said if class-action certification is overturned, it would likely become too costly and cumbersome for the plaintiffs to pursue their cases individually.

The three-judge panel in the U.S. Ninth Circuit Court of Appeals in San Francisco could take months to issue a ruling, the paper said.

As I have written before, the six named plaintiffs look like they have good cases, but the statistical duel between Wal-Mart and its opponents is not easily winnable by either side.

If Wal-Mart wins, will its stock price soar?

Posted by Kevin at 9:33 AM

Examining My Independent Assessment

All academic and independent experts who publish and present on Wal-Mart�s behalf are being scrutinized by our team about possible conflicts of interest.
I'd welcome this, if it were what Wal-Mart Watch was actually going to do. But its promises to "scrutinize" all the presenters at the November Independent Assessments conference for ties to Wal-Mart could easily turn into a "witchhunt", if history is any guide. By "scrutinize", WMW apparently means make invalid insinuations based on their excited interpretations of the available evidence, or lack thereof.

To wit, their recent accusation that Ken A. Mark, co-author of a recent New York Times Op-Ed, was on the take from Wal-Mart, when actually his company provides research about it to other companies. Mr. Mark immediately cleared up the matter on the WMW blog, but WMW still blamed him:

While we would advise Mr. Mark to consider the materials and online promotion of his consulting firm, we too have no further evidence of a conflict of interest.
Well, I was hoping for "we regret the error," or something similar, but for WMW, scrutinizing those favoring Wal-Mart seems to mean lack of responsibility not to defame, and a refusal to admit wrongdoing.

Anyway, go to the Martello Group website yourself; it's a dud, really. From it, I was completely unclear about what the firm did or how it did it. The firm's website lists research about Wal-Mart, but provides NO evidence about financial ties to Wal-Mart, and does NOT insinuate that Wal-Mart is a client. Of course, that doesn't stop Wal-Mart Watch from throwing accusations around. A lesson for all of you academics, indeed.

This leads me to ask, is everyone who writes about Wal-Mart to be required to state explicitly that he doesn't work for Wal-Mart? Apparently, yes.

So let me make an admission right here. I have personally benefited from Wal-Mart's largesse. I have repeatedly gone to their stores and purchased goods, including: a bicycle pump, diapers, various toys, an air mattress, some car cleaners and waxes, a pack of DVD-RW disks, and some diet soda -- all at everday low prices. I estimate I have saved dozens, if not hundreds, of dollars by shopping at Wal-Mart instead of other stores. And those savings are no different from letting me buy goods where I want, and Wal-Mart cutting me a check...

Posted by Kevin at 8:18 AM

August 7, 2005

Is Wal-Mart Becoming More Fashion Conscious?

According to a recent article in the Washington Post [registration required], Wal-Mart wants to upgrade its fashion image, especially in its clothing lines, but through-out its stores.

Wal-Mart's shoppers ... consistently seek clothing and home decor outside the chain -- namely at J.C. Penney, Kohl's and Target (in that order, studies show). One hundred million consumers shop at Wal-Mart every week, but only 34 percent buy apparel there, according to a study by STS Market Research.

For decades, the retailer has relied on its suppliers to tell the chain what's fashionable. The problem was that the company had no way of knowing if the vendors were wrong. "A lot of suppliers got used to selling us large quantities of last year's look," said Watts, the vice president of product development.

It seems odd that Wal-Mart would trust its suppliers on style but negotiate hard on price. Why don't they just ask their suppliers what a good price would be, too? That they don't suggests there is something missing from the article.

The implication of this practice is that both Wal-Mart and its suppliers have been playing a non-repeated game in which Wal-Mart negotiates very low prices but also gets dumped on with older styles. This game might work so long as both players expect not to deal with each other again in the future. But playing the game repeatedly with different players has affected Wal-Mart's strategies.

Given this change in goals for Wal-Mart [the desire for more up-to-date fashions], if the suppliers want contracts with Wal-Mart in the future, they cannot just dump unfashionable merchandise with Wal-Mart for low prices when Wal-Mart takes their word for what is in style.

If Wal-Mart wants more up-to-date styles, it has [at least] two options. One is to develop longer-term working relationships (aka repeated-play games) with its suppliers . The other is to monitor fashions more closely itself; setting up a fashion centre on Fifth Avenue in New York City indicates that Wal-Mart has chosen the second of the two options.

(also posted at The Eclectic Econoclast)

Posted by TheEclecticEconoclast at 11:23 AM

August 5, 2005

Microsoft names Kevin Turner chief operating officer

Yesterday, Microsoft named Kevin Turner to be its first chief operating officer in more than three years. Turner has been the president and chief executive of Sam's Club, the warehouse club unit of Wal-Mart Stores and has spent nearly 20 years in management at the world's largest retailer. Wal-Mart promoted Doug McMillon to replace Turner, effective immediately.

My sources report that cheers rang out in the Home Office when the announcement was made.

Posted by Angus at 11:06 AM

August 4, 2005

Ratcheting up the Hysteria (Draft)

Leviathan Slayer isn't terribly impressed with Liza Featherstone's latest:

In "Wal-Mart's P.R. war", Liza Featherstone lays out a laundry list of alleged sins and then says:

The largest and most profitable retailer in the world -- and in the United States, with 1.3 million workers, the largest private employer -- is becoming nearly as infamous as Enron or the Triangle Shirtwaist Factory.
Infamous in the minds of left-wingers, no doubt, but such infamy tells us nothing about Wal-Mart and much about the internal mental processes of those on the left. To them, a successful, profitable company is comparable to a sweatshop that locks in its employees and allows them to burn to death.
That's going more than a bit too far, I think, but the analogy was implied by Ms. Featherstone. Her claim must be a personal anecdote about her circle of associates, because it is completely unsupported by any evidence about the opinions of the wider population.

To me it seems like many (certainly not all) of Wal-Mart's critics are not making an honest assessment of the current state of the War on WM. For all the new organizations and alliances, the roster of impassioned recruits, a small but growing list of battle victories, and high political connections, the War on Wal-Mart has barely modified the reatiler's domestic and international expansion in stores or supplier base, and more importantly, has not hit the bottom line.

(The most impressive victory of Wal-Mart critics was the pay and promotion reorganization, which I think was largely in response to the gender class action lawsuit. But these not insignificant changes occurred before the current assault, and in a relevant way, prevents NOW from taking the point man position against Wal-Mart.)

WM critics' vocal and blunt attacks on particular issues have scored only minor victories, which is notable because, outside of specific new store locations, Wal-Mart isn't fighting very hard -- or at least very visibly hard -- to win individual battles. It seems to me that WM is sticking to a long-term defense plan, which counts on Wal-Mart's opponents stirring up their base wildly, but not effectively reaching out and convincing nonbelievers of Wal-Mart's evil.

I gather from first-hand, anecdotal, reading that when the conversation of the average online blogger turns to Wal-Mart, it's still mostly about 1) leaving, getting, or keeping a job there, 2) finding low prices on consumer goods, 3) going some place to hang out for a while.

WM's critics think they have unstoppable political momentum, and they are getting positive feedback from Senator Kennedy and lesser politicians, along with generous media coverage. But it's quite a leap from the mouths of media to the minds of men, and getting any federal anti-WM bill passed will require far more political support than the anti-WM forces currently have.

Like Wal-Mart itself, those opposed to Wal-Mart and its labor and supplier practices rarely tell the complete and absolute truth. Keep this in mind when you're told about the size and impact of anti-WM forces:

Years of citizen outrage -- on a slow, under-the-radar boil -- has this year exploded in a highly visible public education effort, backed by a powerful and in many ways united set of forces: two new national efforts, hundreds of community groups, unions, women's rights groups, environmental activists and mad-as-hell individuals.
But that's simply one perception among many; so let's put that paragraph through the Patent-Pending ALP Nonsense Filter:
Years of activist outrage -- on a slow, under-the-radar boil -- has this year exploded in a highly visible smear campaign, backed by a politically-minded and in many ways united set of special interest groups: two new national efforts, hundreds of already existing community groups, impotent unions, leftist women's rights groups, environmental activists and mad-as-hell individuals.

Of course, most people really don't give a hoot.

One can also question whether the characterization of Wal-Mart as an extraordinary lawbreaker is accurate:
Low labor costs and a disregard for the law have been central to the company's way of doing business
Has disregard for the law REALLY been central to the Wal-Mart business model? I'd wager the farm that Ms. Featherstone cannot get a room of business professors and MBA students to agree that a primary secret of Wal-Mart's success is lawbreaking. I don't doubt that low but competitive wages are essential to its business model; but they are also essential to the profitable operation of most retailers, including the infamous mom and pop stores Wal-Mart replaces in the unnamed towns it allegedly destroys.

Ms. Featherstone also ought to realize that, in this universe, cause must precede effect:

Another important thread in recent anti-Wal-Mart history is that for years, communities all over the nation have been fighting to stop Wal-Mart from opening new stores. Their reasons include their likelihood of worsening sprawl and traffic, the company's tendency to destroy downtowns by shuttering local mom and pop stores, its threat to union jobs and research showing that a new Wal-Mart actually increases countywide poverty rates.
Whatever the reasons -- valid or invalid -- for citizens opposing new Wal-Mart stores "for years", the poverty research is almost certainly not one of them, since, if I have the earliest version, it was published only 10 months ago. That the study did not adjust for effect of Wal-Mart's lower prices (which is hard to do), routinely goes unnoticed when people cite it.

Also, I reject Ms. Featherstone's view that government regulation of business has effectively curbed harmful corporate behavior. Economists know that government bureaucrats are not objective regulation enforcers. Regulation is, in a sense, the antithesis of the rule of law; it substitutes straight guidelines with personalities and subjectivities. I view regulators as far-too-easily "captured" (i.e. influenced in thinking, whatever the cause) by any interests, and unions know this very well with regards to both union and corporate control over the functioning of the NLRB.

Posted by Kevin at 1:42 PM

August 3, 2005

Wal-Mart: Independent Assessments Conference (Updated)

On November 4, 2005, Global Insight will be running a Wal-Mart sponsored conference on the economic impact of Wal-Mart on the US.. The deadline for submission of papers is 9/15/05. Oddly, (or maybe not so oddly), it doesn't mention where the conference will be held.

There will be a drastic difference between this conference and the earlier one, Wal-Mart: Template for 21st Century Capitalism?, which had some very interesting papers from sociologists, social work profs, anthropologists, etc., but it was missing one key element: economists. The edited volume of the Template papers will be out next year.

Economists tend to disagree with other academics on issues like Wal-Mart's impact, and we should expect a very different consensus view, and very different reporting from major media.


UPDATE: Although calling for Wal-Mart opponents to send in their papers, Liza Featherstone gets a head start on a smear campaign against any pro-Wal-Mart academic willing to participate in this conference:

The company's eagerness to buy the approval of the intellectual elite is surprising, since most intellectuals are far less powerful than Wal-Mart.
Buy them with what? The unparallelled glamour of an academic conference in an undisclosed location? An overnight stay at a Day's Inn? Free lunch? Oh, please. Wal-Mart is no more buying the approval of economists than Nelson Lichtenstein was buying the scorn of leftists. There is simply no reason to believe that academics are changing their views of Wal-Mart based on the desire to be seen and heard at a conference.

Still, even if all the economists presenting and attending aren't bought, Ms. Featherstone seems to think the entire conference is rigged:

"Independent oversight" will be provided by Global Insight, a financial forecasting firm, which claims on its website that the "positive or negative findings" of the papers "will not be used as selection criteria."

Kind of hard to believe!

Well, I understand that she's skeptical just because Wal-Mart is involved, but just why should I find this hard to believe? Why should I disbelieve Global Insight's clear and detailed statement of objective criteria? Ms. Featherstone presents no evidence that Global Insight's call for papers is a fraud, or that, in the past, they've been known to fake such things.

And why is it OK for a writer at The Nation to indirectly impugn the character of one Glenn MacDonnell (about whom we know nothing except that he is responsible for managing this conference)?

Posted by Kevin at 4:30 PM

Wal-Mart Generates Huge Net Benefits
especially for the poor

One would generally expect that if output markets are competitive and if input markets (including labour) are competitive, then innovation will make some people worse off, others better off, but the net effects will be positive. That is exactly the outcome of recent research.

From a New York Times Op-Ed piece[registration required]:

... to chalk up Wal-Mart's success simply to the exploitation of its work force, as many of the company's most ferocious critics do, is simply wrong, for two reasons.

First, Wal-Mart hasn't just sliced up the economic pie in a way that favors one group over another. Rather, it has made the total pie bigger.
... Second, most of the value created by the company is actually pocketed by its customers in the form of lower prices. According to one recent academic study, when Wal-Mart enters a market, prices decrease by 8 percent in rural areas and 5 percent in urban areas. With two-thirds of Wal-Mart stores in rural areas, this means that Wal-Mart saves its consumers something like $16 billion a year. And because Wal-Mart's presence forces the store's competitors to charge lower prices as well, this $16 billion figure understates the company's real impact by at least half.

...debate around Wal-Mart isn't really about a Marxist conflict between capital and labor. Instead, it is a conflict pitting consumers and efficiency-oriented intermediaries like Wal-Mart against a combination of labor unions, traditional retailers and community groups. Particularly in retailing, American policies favor consumers and offer fewer protections to other interests than is typical elsewhere in the world. Is such pro-consumerism a good thing?

The answer depends on who these consumers are, and Wal-Mart's customers tend to be the Americans who need the most help.

Posted by TheEclecticEconoclast at 5:00 AM

August 2, 2005

John Fernie

John Fernie, Head of School of Management and Languages and Professor of Retail Marketing at Scotland's Heriot-Watt University, has an interesting powerpoint presentation, The Impact of Wal-Mart in European Markets, that draws on personal interviews and survey data from Wal-Mart shoppers in Germany and the UK. The skinny: WM is much better off in the UK than in Germany.

See also his article, Play it Again Sam.

Posted by Kevin at 4:31 PM