October 26, 2005

The Academic Microscope

Businessweek has a review of some of the papers from the upcoming Global Insight conference:


Wal-Mart's decision to put itself under the academic microscope is a brave one. The Global Insight study may end up eclipsing all the others, since it will have internal data Wal-Mart has long declined to release. But given the negative conclusions from the outside studies, the entire conference is looking more like a big risk for a major corporation to take.
In the article, BW links to copies of several papers.

All I can say is that Wal-Mart promised objective research while opponents sneered. Wal-Mart seems to be holding to its promise. Will Liza Featherstone take back her baseless accusation that Wal-Mart was tyring to "buy the approval of the intellectual elite"?

Posted by Kevin at 10:37 AM

October 21, 2005

The Effect of Wal-Mart on Local Labor Markets

David Neumark, Junfu Zhang, and Stephen Ciccarella have an extensive paper The effect of Wal-Mart on local labor markets. Abstract:

We estimate the effects of Wal-Mart stores on county-level employment and earnings, accounting for endogeneity of the location and timing of Wal-Mart openings that most likely biases the evidence against finding adverse effects of Wal-Mart stores. We address the endogeneity problem using a natural instrumental variable that arises from the geographic and time pattern of the opening of Wal-Mart stores, which slowly spread out from the first stores in Arkansas. In the retail sector, on average, Wal-Mart stores reduce employment by two to four percent. There is some evidence that payrolls per worker also decline, by about 3.5 percent, but this conclusion is less robust. Either way, though, retail earnings fall. Overall, there is some evidence that Wal-Mart stores increase total employment on the order of two percent, although not all of the evidence supports this conclusion. There is stronger evidence that total payrolls per person decline, by nearly five percent in the aggregate, implying that residents of local labor markets earn less following the opening of Wal-Mart stores. And in the South, where Wal-Mart stores are most prevalent and have been open the longest, the evidence indicates that Wal-Mart reduces retail employment, total employment, and total payrolls per person.
(Discovered through this article in Businessweek).

Posted by Kevin at 7:37 AM

October 3, 2005

Data about Wal-Mart

Over at Wal-Mart Space, Bobby Gerry is doing something I should have done long ago: making all of Wal-Mart's public data -- finances, number of stores, square footage, etc -- available on the net in one easy-to-download location.

I think this is a great public service, and hope that Wal-Mart and its opponents realize that this type of openness -- putting all the cards on the table -- is what I've been looking for all along from them.

Currently available:

1) U.S. Store Count
2) International Store Count
3) Balance Sheet
4) Cash Flow
5) Income Statement

Posted by Kevin at 12:57 PM

August 11, 2005

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

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.

H/T WMW.


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

July 26, 2005

A Lively Discussion

I'm having a lively discussion over at Veritas et Venustas; my insistence that it's not possible for 70% of Wal-Mart's merchandise to be made in China has not received a warm welcome. The 70% figure was only tangential to the actual point of the post (which I agree with), that WM's "green" store is not as green as WM would like us to believe.

I once bought the 70% figure wholesale too, and I don't blame others for it. Thanks to Bob for concisely summing this up:

Besides, how can 70% of their products be made in China when they only account for something like 15 billion of imports from there. Possible yes, likely, no. That would mean that 30% of their goods accounts for 90% of cost of goods sold.

And thanks to The Box Tank for pointing us to the post.

Posted by Kevin at 10:27 AM

July 12, 2005

Even with High Oil Prices, WM Still #1

Wal-Mart beat out the big energy companies to land the top slot of the Fortune Global 500:

Wal-Mart took No. 1 on Fortune magazine's annual list of the Global 500, the fourth year in a row the retailer has placed at the top of the list.

Rounding out the top five in the 2005 rankings are BP (No. 2), Exxon Mobil (No. 3), Royal Dutch/Shell Group (No. 4) and General Motors (No. 5).

Position in the Fortune Global 500 is determined by total revenue in the prior year.

However, it is not the most profitable company....

Posted by Kevin at 4:24 PM

April 29, 2005

That's Where I'd Look

I emailed Sam's Club from my alwayslowprices.net account to find out where online I could find more details about their "Small Business Confidence Index".

Here is my email:

According to your recent press release "The SAM'S CLUB Small Business Confidence Index will be released monthly to the media, and also will be available for viewing at http://www.samsclub.com"

However, I cannot find the Small Business Confidence Index on samsclub.com.

Could you provide me with a link?

Here is Sam's response -- I kid you not:

Dear Jeff,

We apologize for the inconvenience. We are unable to provide you with a link to the Small Business Confidence Index, but it is located on our home page at www.samsclub.com. The link is located on the left-hand side under "Order Your Tires Online." Thank you, and have a great day!

Patrick

Of course, "Order Your Tires Online" is on the right-hand side of the page, and the Small Business Confidence Index is immediately below it, and if I ever change my name to Jeff, I'll find it even more useful...

Posted by Kevin at 8:37 PM

April 26, 2005

Cross-Shopping

BIGresearch produces the Small Business Confidence Index for Wal-Mart. They also produced a ccomparison of Wal-Mart shoppers and other store shoppers. They found that WM has quite a bit to gain from nibbling on competitors' markets:

Percent of best customers shared with Wal-Mart

Shoes: Payless 71%

Electronics: Best Buy 62%

Linens & Bedding: Bed, Bath & Beyond 54%

Home Improvement: Home Depot 64%

Prescriptions: Walgreens 71%

Groceries: Kroger 65%


Look at those last three, and say uh-oh!

The full report is $249, so I haven't read it. Keep updated about BIGresearch on their blog.

Posted by Kevin at 3:34 PM

April 25, 2005

WalMart Watch Fudges the Numbers

Apparently, WalMart Watch just can't help but use numbers in a misleading way:

Meanwhile, Chinese workers are getting paid on average 17 cents per hour.
Note that the link is in the original. Following it leads to a document that contains a table with a source statement. I found and read the source, and it doesn't support 17 cent claim.

I added in the comments:

That 17 cent an hour figure is NOT AN AVERAGE.

It is the figure from ONE factory of bobblehead dolls, in which, according to a summary prepared by your own labor-allied source, (the writers of the Toys of Misery 2004 report) "Wages are as low as 16.5 cents an hour and just $16.75 for a seven-day, over-100-hour work week."

Please be honest with the data, and please be honest with your readers. Start by admitting that you misrepresented the data from your sources, and then take down the faulty "average" right now.

Posted by Kevin at 4:11 PM

Small Business Confidence Index

Sam's Club is getting into the macroeconomic data business with a small business confidence index:

Sam's Club, the warehouse store division of the world's largest retailer, surveyed 1,200 small business owners about the economy, their hiring plans and other issues. The retailer said it will release its new Small Business Confidence Index monthly.

Wal-Mart's (Research) Sam's Club targets small business owners and has gathered data from them for some time, but until now it has never publicly released such information.

The retailer said small business owners have more confidence in the economy than consumers do, but just 45 percent of those surveyed said they were confident or very confident about the chances for a strong economy in the next six months. That was a drop of almost 7 percentage points from a year earlier, Sam's Club said.

Why would Wal-Mart create its own survey about small businesses? Because their slogan is that they are "in business for small business", and this is national small business week. But why not trust the survey conducted by say NFIB, which has a small business optimism index?

Here's the press release with summary tables. Some methodology detail:

Data for the Small Business Confidence Index is based upon analysis of 1,200 business purchasers, surveyed monthly by BIGresearch on critical issues affecting small businesses (Margin of error: plus or minus one percent).
There is no such thing as a simple "margin of error" for surveys that ask about people's beliefs and put them into very narrow buckets... but that is the practice nowadays.

I've suggested before that Wal-Mart publish a price index for its stores, perhaps on a regional basis; they must have one already for internal consumption. Economists could REALLY use this as a better benchmark for the actual prices that people have to pay...

Posted by Kevin at 2:10 PM

February 3, 2005

A Wal-Mart Price Index

Unfortunately, this post is just speculative, but I think it would be marvelous if Wal-Mart published a price index for categories of goods and services sold in its stores--from box cereal to pickles to apples to t-shirts and tires and oil changes. I'm NOT insisting that WM must publish data as a matter of government requirement; these types of onoerous requirements give government a bad name. Nor am I asking that WM publish an endless list of prices; the world is already awash in misunderstood and flashily published data.

Instead, I think a Wal-Mart price index would be extremely important information to convey to researchers, shoppers, and opponents. It would be wonderful to compare price changes inside of Wal-Mart to other retailers and to the consumer price index. How much do Wal-Mart's productivity enhancements lower the rate of price increases inside the store versus nationwide? Are you getting the benefit of Wal-Mart's productivity (through the pressures of competition) if you shop elsewhere?

Also, one can be far more assured about the accuracy of the data from Wal-Mart's databases than from the sampling procedures employed by the BLS. Granted, this would not measure economy-wide price changes, but it would measure very accurately a large chunk of very important sales.

Perhaps a corporate-university partnership can be put into place in which researchers are granted unfettered access to the data over long-time periods, and are permitted to publish a specific index created with a publicly-available methodology. However, these researchers would have to be held to even stricter standards than those taken by the Canadian and American statistical agencies.

Wal-Mart, if you're reading, I'd be more than eager to take on this task...

Posted by Kevin at 11:11 AM

January 13, 2005

Walmartfacts.com

In case you missed it in the post below, WM's new website, Walmartfacts.com is chock full of interesting information--some original, some banal. To me, the information presented feels carefully selected, but far less so than the info on WM's opponents' websites. For example, WM opponents frequently discuss full-time employees quoting stats that include wages for full and part-timers. However, WM is clear that they're talking about full-timers only:

Currently, 74 percent of Wal-Mart�s hourly associates in the United States work full-time. That is well above the 20 - 40 percent typically found in the retail industry. Our average hourly wage for regular full-time associates in the U.S. is $9.68 an hour, almost double the federal minimum wage. Wal-Mart�s average full-time wage in urban areas is slightly higher than the national average. For example: Chicago, $10.69; Austin, TX, $10.69; Washington D.C./Baltimore, $10.08; Atlanta, $10.80; and in Los Angeles, $9.99.
I guess this all depends on your idea of urban! Just one thing: there are no Wal-Mart stores of any vareity inside of Washington, D.C. (check for yourself!), although they're peppered in the suburban D.C. metro region! And there is one WM just inside the outer ring of Baltimore, and several just outside... I'm sure WM opponents are just as innacurate with their use of "urban"...

Posted by Kevin at 10:54 AM

January 5, 2005

Healthy Gains in Sales

Reporters are now writing that WM Christmas sales were "healthy" in 2004, since they've finally realized what Wal-Mart counted on all along:

The last-minute surge in sales was helped by the shopping spree with the use of gift cards that make up 8% of the total sales this year and can be booked by retailers only after they are redeemed. The holiday period sales that account for 23% of retailers� revenue for the year showed solid results. A drop in oil prices as well as other reassuring macroeconomic data drove consumers into stores.

Earlier analysts issued less optimistic forecasts. MasterCard Advisors, a consulting unit of MasterCard International, projected an increase in holiday consumer spending of 8.1% compared to last year, while the National Retail Federation projected a 4.5% increase. The difference in numbers is explained by the fact that MasterCard Advisors includes in this calculations both online sales and sales of gift cards, while NRF only accounts for only a part of online shopping and excludes gift cards.

Posted by Kevin at 11:34 AM

January 3, 2005

WM December Sales now at 3%

Same store sales for the December period are 3% higher instead of 2% higher. ALP readers will not be shocked, since we informed you that Wal-Mart itself announced before Thanksgiving that they were expecting a later shopping season in 2004:

Wal-Mart Stores said it now expects December sales to be at the high-end of its previous forecast, boosted by better-than-expected sales in the weekend after Christmas.

Posted by Kevin at 9:32 AM

December 29, 2004

Wal-Mart's Asinine Response to Me

Yesterday, for the first time I used Wal-Mart's online "contact us" form to request information from WM. In particular, I submitted the following detailed request for opening dates for the first 19 Neighborhood Markets:

To Whom it May Concern,

I have been using walmartstores.com for basic research on Wal-Mart Neighborhood Markets. I have noted, however, that store opening data goes back only to January 2001.

Would it be possible to be provided basic information--store locations and store number--about the first 19 Neighborhood Markets opened by Wal-Mart in 1998, 1999, and 2000?

I could compile this information from press releases and Lexis-Nexis, but thought that somebody at Wal-Mart must have this information handy.

Yours,

Kevin Brancato
http://alp.truckandbarter.com
Apparently, nobody actually reads the emails sent to them because I received the following asinine response:
Thank you for your message.

You may go to www.walmartstores.com, click on a category under 'Company Information' at the left column to find out more about Wal-Mart.
Or you may simply call our Corporate Office for assistance at: 1-479-273-4000.
Thank you,
Customer Relations

First of all, I told them the information was not on their site, so there's little use in me looking there again. Second, the instructions on where to click are outdated. There is no banner with the name "Company Information" on that page; instead the page has several lists of information about Wal-Mart not containing the information I requested.

Come on, WM, you can do better than this! Forward the email to somebody who might know. Even a simple, "No, we cannot provide this" would have sufficed...

Perhaps it's my fault... from now on I'm considering this blog the equivalent of a newspaper and will insist on dealing with the officers at media affairs.

Posted by Kevin at 11:06 AM

December 27, 2004

The Number of Wal-Marts by State

WM_locations_WM_WATCH.gif

The above map was taken via Wal-Mart watch. However, the data used to create it appears out of date, since there are more stores now than then:

At January 31, 2004, we operated in the United States 1,478 Discount Stores, 1,471 Supercenters, 538 SAM�S CLUBs and 64 Neighborhood Markets. Internationally, at January 31, 2004, the Company operated units in Argentina (11), Brazil (25), Canada (235), Germany (92), South Korea (15), Mexico (623), Puerto Rico (53) and the United Kingdom (267). We also operate through joint ventures in China (34). Additionally, we hold a 37.8% interest in Seiyu, a Japanese retail chain which operates approximately 400 stores throughout Japan.
Only 32 NM's are in the data...

But, these same data were used three weeks ago to answer a question on Google Answers; for $10 and another $10 tip, the old data were and placed into an Excel spreadsheet summarizing the number of Wal-Mart's, Supercenters, Sam's Clubs, and Neighborhood Markets in the US, as of an unknown date.

Posted by Kevin at 11:21 AM