October 22, 2005

Didn't Make the Cut

Audi has sponsored a public release of New York Times archives and has put up an advertising section poll that asks, "Who is America's most influential business leader?"

I just wanted to note that Lee Scott is not one of the options...

Perhaps the NYTimes never managed to write a success story about Scott like they did with Jack Welch, Bill Gates, Warren Buffett, and Steve Jobs.

Posted by Kevin at 2:16 PM

October 11, 2005

"SCARY SERIOUS about the money"

Of course it's true that not all corporations maximize long-run profits; but the notion that people -- employees, consumers, suppliers, etc. -- benefit from companies not maximizing profits is just plain wrong. BBC American would probably not agree with that sentiment, but he's noticed something interesting: endless punishing of incompetence, which gives Wal-Mart a large profit advantage, can make a Wal-Mart job far less of a fiefdom than more respectable workplaces:

Oh, and someone asked which was worse, my real job or my Wal-Mart job. It is a tossup, but I'd actually say my real job at the newspaper. You sort of expect Wal-Mart to be a disaster area. My real job is at a paper owned by a Fortune 500 company and you'd think that working with college graduates and professionals would be easier. Wrongo-bongo.

It is worse than Wal-Mart, because some people have been promoted past their ignorance point. Wal-Mart fires fools fairly quickly, because they usually screw up so much they don't dare let the profits slip. For all Wal-Mart's stupidity, they are SCARY SERIOUS about the money. Department manager slacking off? Back to the sales floor and someone else has that pricing gun and handheld computer.

Posted by Kevin at 3:34 PM

September 12, 2005

Public Announcements Have Zero Marginal Total Benefit

Gratchthegears sells cellphones in Wal-Mart. He's run the numbers, and found out that in store public announcements do not affect sales of cell phones:

I work at wal-mart, I sell cell phones there. It is not a bad job I like it, I just don't like the company I work for. Well I like crunching numbers while I am doing nothing else at work. I was looking at the number of PA vs sells and they show no effect on each other. One month we did 300 PA and that month we sold the second most for the year. Another month we did 0 PA and we sold the most phones in a month for the year.

It was good proof it also supported my believe that PAs are a waste of time and no one listens to them. (In fact before I started working there I had no idea the did that many PAs and I can't remember listening to a one of them.) I told my bosses what I thought and showed them what proof I had. Of course they did not care what I had to say.

Well we just got an order to... guess what... STOP DOING PAs! You know why? Because they are a waste of time and no one listens to them. Amazing that I know what I was talking about.

No, it's amazing that they're not listening to you.

Posted by Kevin at 1:14 PM

August 31, 2005

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

June 17, 2005

Stupid "Open Availability" Policy Terminated

Corporate slams a store manager for being too-hardline on hours:

Wal-Mart headquarters overruled a policy decision by one of its store's that would have terminated any worker who failed to agree to be available to work any shift between 7 a.m. and 11 p.m., seven days a week, according to the Charleston Gazette (West Virginia)....

"It is unfortunate that our store manager incorrectly communicated a message that was not only inaccurate but also disruptive to our associates at the store," Dan Fogleman tells the Gazette. "We do not have any policy that mandates termination."

The Gazette (rr) is more extensive:
In announcing the any-shift-any-day policy, store manager John Knuckles had told employees that Wal-Mart headquarters had mandated the change at stores across the nation during a conference call earlier in the week.

He repeated the claim in an interview with the Gazette on Tuesday. �It�s the most positive thing I�ve seen in 15 years at Wal-Mart,� he said then.

But corporate officials deny that version of events. �Wal-Mart ha

Posted by Kevin at 7:51 AM

June 2, 2005

Annual Shareholders Meeting

Wal-Mart's annual shareholder meeting is Friday. Here is a list of links, which will be continually updated over the next few days:

1) The melting pot:

Mickey Finn�s Irish Pub on Dickson Street was packed with Wal-Mart employees Tuesday night. "It was probably the funnest night I�ve ever had in my life," said Mickey Finn�s bartender Adam Linz. "You�ve got Japanese, Mexicans, Brazilians, Canadians, Americans and Irish all in one itty-bitty place � all getting along. It was the best atmosphere I�ve been around in a while." Linz said he rang up triple the business of a normal Tuesday night.

2) Groups complain:

The group Wake-Up Wal-Mart, backed by the United Food and Commercial Workers Union, staged events Wednesday to call for states to adopt legislation that would require Wal-Mart to provide employees affordable health care.

Wake-Up Wal-Mart director Paul Blank said the group wants to do more than create media pressure on the Bentonville-based retailer.

"It is a little bit broader than public opinion. This is a grass roots movement across the country of Americans who want to change Wal-Mart," Blank said.

Blank said Wal-Mart should set the standard for how workers in the nation are treated and should sacrifice profits to help ensure its workers live above the poverty line.

3) Standards Review

A group of Wal-Mart investors led by city controller William Thompson and Illinois State Investment Board chairman Edward Smith called on the company's board to name a committee of independent directors to review the retailer's legal and regulatory controls.

The group, which controls $545.8 million of Wal-Mart shares, said in a statement it was concerned by the government's investigation into the use of illegal immigrants to clean Wal-Mart stores. The retailer paid $11 million to settle that case.

4) Rob Walton shows humility:

"They're not standing in line for lower pay or less benefits," said Lawrence Jackson, executive vice president of human resources, which Wal-Mart calls its "people division."

But the loudest cheer was reserved for a moment of humility when Chairman Rob Walton acknowledged that executives were "human" and "sometimes we make mistakes."

Protesters were nowhere in sight at the University of Arkansas basketball arena where the meeting was held, although some marched through Fayetteville on Thursday night with banners criticizing Wal-Mart's pay and benefits.

5) Martha Burke has her say:

A feminist leader drew rounds of applause from Wal-Mart shareholders Friday as she chided company managers for having only two women on its 14-member board. In the end, Wal-Mart asked shareholders to reject initiatives she backed.

Martha Burk, chairwoman of the National Council of Women's Organizations, said Wal-Mart should give a breakdown, by race and gender, on how stock options are distributed.

Posted by Kevin at 8:57 AM

May 13, 2005

Sales "Below" Expectations

April same-store sales increases were below expectations in the sense that the 9th floor is below the 10th floor:

The nation's discounters, whose customers have been particularly hurt by high gas prices and job weakness, had another lackluster month. Wal-Mart had a 0.9 percent gain in same-store sales, slightly below the 1 percent consensus prediction of Wall Street analysts polled by Thomson Financial.

Wal-Mart did get a boost from Sam's Club, which posted a 4.9 percent gain for the month. That compared with the company's flagship discount stores, which had only a 0.1 percent increase.

Also note that the previous figures IGNORE Wal-Mart's expansion. These don't:
Wal-Mart said quarterly net income grew to $2.5 billion, or 58 cents per share, in the three months ended April 30 from $2.2 billion, or 50 cents per share, a year earlier. The company said first-quarter earnings were boosted by $145 million, or 3 cents per share, from tax and legal resolutions. Excluding the items, earnings per share totaled 55 cents per share, a penny below Wall Street expectations.

Sales rose 10 percent to $70.9 billion from $64.76 billion a year ago, while total revenue including sales and other income grew to $71.7 billion from $65.4 billion a year ago.Here's the full press release.

Let's include H. Lee Scott's comments, for the fun of it:

Chief executive officer Lee Scott said: "We achieved record results in the quarter. Yet with higher gasoline prices and a cooler and wetter spring than normal, we missed our plan. We are making the necessary adjustments and I anticipate better results in the second half of the year."

In a recorded message, he told journalists: "Our results were not up to Wal-Mart standards," adding "The biggest unknown is the impact of gasoline prices on our customer base. If oil prices stay at the current level or hopefully go lower, we would see better sales momentum."

In other words, we can't predict the weather and we don't control oil markets, so bugger off.

Posted by Kevin at 7:01 AM

April 21, 2005

WM and Google

Adam Penenberg compares Wal-Mart to Google:

Key moment in company's history:

� Wal-Mart: 1988, when it opened up its first Supercenter in Washington, Missouri, thereby giving new meaning to the term "one-stop shopping."

� Google: 2000, when, following Yahoo's lead, it began selling advertisements based on keywords, giving new emphasis to the term "relevancy."

In-house technology:

� Wal-Mart: Developed information technology (it operates the nation's largest private satellite communication system) and perfected the use of the bar code to speed up the supply chain so that both Wal-Mart and the vendor know exactly how many blenders, brooms and baseball gloves they have sold, and how many need to be delivered to specific stores.

� Google: Developed algorithms to rank web pages by link popularity so that searches are not only fast, but also yield the most useful results.

Posted by Kevin at 6:04 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

January 19, 2005

Farmers Must Emulate Wal-Mart?

Would you take business advice from a former Congressman?

HOUSTON � American farmers may need to pay attention to Wal-Mart business practices as they look for ways to survive in a global economy.

�People either love Wal-Mart or hate it,� says former Congressman Charlie Stenholm, �but (the company) is tremendously competitive. The working men and women who get good prices like it. Competitors who can�t compete, don�t.�

Stenholm, who recently signed on with a Washington D.C. law firm as an agricultural advisor after losing the congressional seat he�s held for 26 years to Texas re-districting, spoke at the recent Conservation Tillage, Cotton and Rice Conference in Houston and encouraged farmers to do everything possible to improve efficiency and to conserve resources.

The marketplace, he says, will play an increasingly important role in on-farm decisions. He says farmers can look to Wal-Mart and airlines for models of how and how not to run their businesses.

Posted by Kevin at 11:06 AM

December 15, 2004

Walmart Executives Fired

UPDATE 3/26/05: Thomas Coughlin has been fired.

Reader Reid Davis sends in a scoop:

BENTONVILLE � A number of Wal-Mart executives have been terminated, a company spokesman confirmed Tuesday night. "Several executives in the Wal-Mart Home Office have been terminated from the company in the past several days," said Jay Allen, a company spokesman.

Three sources told The Daily Record that among those let go was Jim H. Haworth, executive vice president of operations for the Wal-Mart Stores Division.

Allen declined to confirm any names.

Allen also declined to state the reasons the executives were terminated, citing privacy issues. He would not say whether the terminations were because of a recent incident or a long-term investigation. "Our management team, well, you regret losing people, but the team is deep enough the operations will not be impacted (by the recent terminations)," Allen said.

The firings have no connection with Tom Coughlin�s pending retirement, Allen said. Coughlin is vice chairman of the board of directors of Wal-Mart.

He will retire Jan. 24.

They have more names, but without further confirmation, journalistic ethics prevent the paper from releasing them.

UPDATE 12/16/04: Some more information is available from Bloomberg:

``There's an enormous amount of pressure building up at the executive and upper middle management levels to make the company more like a global fortune 50 company,'' said Richard Hastings, chief economist at Bernard Sands LLC, in Charlotte, North Carolina. ``They have been a home-grown, home-spun company. They're trying to make sure they look to the future and that future has to include fewer law suits, less negative press, and the rebound in sales momentum.''

Haworth was among officers who addressed analysts and shareholders at the company's annual meeting in June. He appeared on stage with about a dozen other officers to provide updates on the company's various divisions.

And The New York Post names some names:
Ken Reese, director of operations for Wal-Mart's Tire & Lube Express; Terry Pharr, a senior vice president; and Chad Madison, who worked for the company's Neighborhood Market stores, were also said to have lost their jobs, according to the Northwest Arkansas Business Journal.

Posted by Kevin at 11:47 AM

November 10, 2004

David Farber on Small Town WM

Interesting piece on WM's small-town culture, and the still dominant ethos of Sam Walton:

Scott and Chief Financial Officer Tom Schoewe earned a combined $14 million in stock and cash in 2003. But on business trips, the two will share a $49 hotel room.

"Sharing rooms is a very symbolic part of what we do," Scott says. "It's also an equalizer. If I'm asking the district managers to share a room, but I won't share a room with Schoewe, then what am I saying? There are two different standards here? The customer is the most important thing for all of you, but for me I think I'll run a different standard.

"You can't do that. You can't do it because it's not how Sam would have done it."

Says Glass, "Sam has been gone for a number of years now, but he's still alive and well in this company to a great extent. There's not a day that goes by that I don't hear conversations around here about what Sam would do or how he felt about something."

Posted by Kevin at 10:24 AM