Springfield, MO. Wal-Mart Gets Another Class Action Case
Wal-Mart went to the head of the class again this week, when a Western District Appeals Court in Missouri affirmed a lower court ruling that Wal-Mart workers in the Show Me State can bring a class action lawsuit against the retailer for forcing workers to go without meal and rest breaks. These so-called “off the clock” lawsuits charge that Wal-Mart required its employees to clock out—but then stay on the job and work without pay, sometimes cleaning up their department for hours. Wal-Mart is slogging through such cases in as many as 30 states. The company routinely challenges class action cases, because it is far less expensive for Wal-Mart to defend itself against a bunch of unrelated smaller cases—many of which take years to pursue and are dropped by the plaintiffs—than to deal one large class of thousands of plaintiffs. The company routinely argues that it has no company-wide policy regarding off the clock work, and that each store is individually managed, and thus class actions combining many stores under one case are not appropriate. But Wal-Mart has lost major “off the clock” class actions in California, Colorado, Pennsylvania, and New Jersey. The company tells its stockholders, “(We) cannot reasonably estimate the possible loss or range of loss from these lawsuits.” In the Missouri case, the state appeals court rejected Wal-Mart efforts to overturn the class action determination. Wal-Mart claims that class action certification has been denied by the courts in 14 cases. They claim that class action status has been granted in whole or part in 8 cases. Missouri would be the 9th. class action status certified. A Wal-Mart spokesman told the Associated Press the company disappointed by the Missouri verdict. This case began in 2002 when 5 Wal-Mart workers in Missouri charged that the company compelled them to work without pay after they had clocking out. Three years later, the Jefferson County Circuit Court ruled in favor of class-action status, and determined that the affected class of workers encompassed as many as 200,000 current and former Missouri workers employed by Wal-Mart. The lawyer for the employees said he hopes the case will come to trial about a year from now.
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Topics: Lawsuits
Posted by Al Norman on Friday, June 15, 2007 | Permalink
Detroit, MI. Farmer Jack: Another Grocery Chain Starves
Nowhere has Wal-Mart’s impact been more visible than in the food industry. When Wal-Mart began opening up superstores almost twenty years ago, the grocery industry looked very different, with sales leaders who no longer sit on top. Wal-Mart is now the largest grocer in the U.S., but its rise has added little value to the economy, since groceries bagged at Wal-Mart merely displaced groceries sold at other existing supermarkets. Sprawl-Busters has written often about the labor losses suffered as a consequence of this Great American Food Fight. Not only have thousands of jobs been lost---but those which remain at Wal-Mart are lower-pay jobs than the ones they replaced. The latest in this long food chain of casualties: Farmer Jack. This week Sprawl-Busters received the following message from a correspondent in Michigan: “An unfortunate update from Detroit. Our 83 year old local unionized grocery chain, which was bought by A&P in 1989, is closing or selling all 66 stores by July 7.
Approximately 5,100 United Food & Commercial Workers members will lose their jobs at Farmer Jack. They cited unfavorable market trends.” In April, 2007, the media carried stories about the owner of Farmer Jack, the Great Atlantic & Pacific Tea Co., making plans to sell the 66-store supermarket chain by the end of the summer. Most Farmer Jack stores are in metro Detroit. A&P said at the time that it was reviewing a number of bids for the stores. A&P said the stores would be sold in groups, and that poor sales were the cause for the sell-off. A&P CEO Eric Claus told the Detroit News at the time, “While this is the correct action for A&P, it is also a difficult one. We appreciate their (employees’) efforts and commitment as well as the patronage of our shoppers and regret that ongoing market conditions and other priorities necessitated this action.” No one stepped forward to buy the whole chain, so A&P tried to sell them piecemeal. The company had negotiated with the UFCW to cut wages two years ago to help Farmer Jack, but A&P had “other priorities” than protecting Farmer Jack, which it owned for less than two decades. At least two large food distributors had been named as potential buyers for the Farmer Jack divestiture. One shopper summed up the potential loss of Farmer Jack to the Detroit News: “I hate that it (might close). I think it’s bad for the neighborhood, but that’s how things are going for the city—everybody’s moving out.”
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Topics: Economic/Small Business | Workers Rights & Wages
Posted by Al Norman on Friday, June 15, 2007 | Permalink
Horry County, SC. Residents Gearing Up To Battle Wal-Mart Supercenter
Wal-Mart has announced plans to build a supercenter on Route 17 in Horry County, South Carolina at the Garden City Beach Connector. The company is planning for a store opening in the fall of 2008, but community opponents hope to make them miss that date. Wal-Mart submitted its plans to the Horry County planning department two months ago. The Horry county planning staff will make the decision on the 184,109 s.f. project. According to the Sun News, area residents say the location for this huge store couldn’t be worse. “That’s a dangerous place because of the traffic,” one area resident told the News. “How can the county do that without a public hearing? I don’t see why the community doesn’t stop it.” A Wal-Mart official explained, “The No. 1 thing for folks to understand is when we put in a new center, that’s to capture existing traffic.” In other words, all Wal-Mart is doing is shifting market share by redirecting shoppers to their location. Officials said Wal-Mart has not indicated if it will replace a vacant building on the site, or build on vacant land at the site. Wal-Mart already has five locations in Horry County.
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Topics: Traffic/Sprawl
Posted by Al Norman on Friday, June 15, 2007 | Permalink
West Des Moines, IA. Wal-Mart’s Impact on “A Small World”
As the Presidential candidates swarm around Iowa, will any of them find the Wal-Mart story that has been kicking around that state for more than 35 years now? There are countless stories, like this one, from a merchant in Iowa, who found out that retailing can be a very small world. Here is his story, sent this week to Sprawl-Busters:
I now own a small antique store in West Des Moines, Iowa in a small place called Historic Valley Junction. It is the original small railroad town strip from the late 1800’s. It has all small businesses and restaurants. Prior to owning an antique store I owned a retail store. We had a mix of items from greeting cards to Wizard of Oz. We tried to carry lines of toys and fun things not carried by the box stores. The store (A Small World) was in business for sixteen years. I finally had to close and lost everything I had ever saved---around $285,000. Most of our problem was caused by a Wal-Mart located not too far from Valley Junction. An example of our problem was we had a PEZ candy section. We carried a new line of PEZ key chains. I purchased them out of New York for $1.75 plus shipping and sold them for $3.50. One of the last times I was in Wal-Mart there they were by the check out lanes for $1.79. There is no way to compete or explain to a customer the difference in price. While I still had A Small World, I was asked by a small town to come down and appraise antiques for their small town celebration. I was happy to do so. On the way home I stopped in my Dad’s hometown of Indianola, Iowa. Indianola now has a Wal-Mart. The town square had two stores left....everything else was gone. It made me sick. When I closed out my store and switched to antiques, I took the few dollars left and created our BOYCOTT WALMART bracelets. We sell them for $2.50 or wholesale them to towns or groups with a cause for fundraising.
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Topics: Community Impact | Economic/Small Business
Posted by Al Norman on Tuesday, June 12, 2007 | Permalink
Can Surrogate Bharti Succeed Where Wal-Mart Failed?
This article highlights the aggressiveness of Wal-Mart’s international expansion, as its sales stagnate domestically. Legally and culturally, Wal-Mart continues to struggle to find its place in the rapidly-growing Indian retail market. So instead of promoting its own brand, it is using the partnership with Bharti to establish a foothold.
Bharti Wal-Mart locations expected in India by early 2008 [Blogging Stocks]
Wal-Mart’s focus on China and India as leading international prosperity markets is pretty well-known by now. While Wal-Mart’s growth is stagnating here in the U.S., the world’s largest retailer is looking to immediate gratification in international markets as it tries to grow that enormous $344 billion full-year revenue stream even higher.
Wal-Mart’s partnership with India’s Bharti is going to take some time since there are brand management and legal issues to get past, but Wal-Mart expects to begin opening the first of six stores in less than a year. While that may sound small, Bharti Enterprises group chairman and CEO Sunil Mittal indicated that these initial openings will just be the start, as Wal-Mart/Bharti may “put up several hundred stores over four to five years”.
Unlike Wal-Mart’s purchased interest in China’s Trust-Mart retailer (which gave the company instant access to the Chinese market), India is a little different. Wal-Mart and Bharti are operating as a joint venture, which provides a few details that must be shored up before complete retail operations can commence. Wal-Mart’s interest in India, though, goes beyond a possible revenue stream. The world’s largest retailer has stated that it intends to source more products from within India as well as develop a supply chain in that country.
So, as same-store sales slow in the U.S. (unlike some of the competition), Wal-Mart’s progressive international strategy is starting to take some serious roots here.
Topics: | | India
Posted by Alex Goldschmidt on Tuesday, June 12, 2007 | Permalink
North Cornwall, PA. Lack of Quorum Derails Wal-Mart---For Now
Residents in North Cornwall, Pennsylvania say that Wal-Mart’s time has run out, and the store has been defeated after a contentious two year battle.
Lawyers for the Citizens for Responsible Growth (CRG) told the Lebanon Daily News this week that the township failed to act in time to challenge a zoning decision that renders land Wal-Mart needs to build as not properly zoned for retail uses. The 95 acres of land Wal-Mart eyed was rezoned to Commercial in 2003, but has now switched back to office/institutional and agricultural, according to the citizen’s group.
“Our position is that we have a deemed approval, and the underlying zoning ordinance amendments never occurred,” the group told the Daily News.
“Accordingly, at this time, the properties remain zoned office and institutional and agricultural.” Concern with zoning along Cornwall Road began in early 2005 after Wal-Mart filed plans to build a super center on the west side of the road. In 2006, another developer purchased 110 acres south of the Wal-Mart site. Supervisors were considering re-adopting the township’s entire zoning ordinance due to fears the current ordinance might not stand up to legal scrutiny. A Pennsylvania Supreme Court ruling issued last September allows challenges to any local law that has not been adopted according to legally correct procedure—and such challenges are not just limited to 30 days after the local law takes effect. CRG filed a legal challenge to the zoning amendments adopted in 2003, which opened the Cornwall Road area to commercial development. When the land Wal-Mart now wants was rezoned four years ago, the township failed to comply with the legal notice, advertising and procedural requirements, rendering the zoning change null and void, CRG says.
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Topics: Zoning Regulations
Posted by Al Norman on Monday, June 11, 2007 | Permalink
Hanford, CA. State Supreme Court Upholds Limits On Size and Location of Superstores
A decision by the California Supreme Court two days ago in a 4 year old case has reinforced the right of cities and towns to regulate the size and location of big box stores—as long as they have defined a clear public purpose in doing so. Even though a small merchant appears to have lost in this case---small merchants everywhere have won. Here are the basic facts in the case, Hernandez v City of Hanford: In 1989, the city of Hanford, California created a new commercial district of several hundred acres of land called the “Planned Commercial” district---designed for large, big box stores. City officials wanted to create a zone that would allow big stores, but not have a negative impact on the downtown commercial district. Specifically, the city did not want to allow the big box zone to have uses that were already prominent in the downtown, because they wanted those uses to remain downtown—such as furniture stores, banks, car dealers, and professional offices. The new PC district allowed department stores to sell furniture---but did not extend that right to furniture stores. The city allowed “home furnishings” accessories to be sold in retail stores in the PC district, but furniture stores could not sell furniture. Stores like Wal-Mart, Home Depot and Sears, which came to the PC district, were selling furniture. In 2002, a downtown furniture merchant tried to open up a furniture store in the big box district. When the new store opened, a city inspector instructed the merchant to remove all furniture from the store, and the owner complained that the zoning code was being enforced in a discriminatory fashion, because department stores in the PC district were being allowed to sell furniture, but he could not---in the same district. After conducting a series of study sessions, the city decided to change its code in 2003 to allow department stores over 50,000 s.f. to sell furniture only in one location within the store, and no larger than 2,500 s.f. of floor area. The PC zone was rewritten to state, “the sale of furniture is prohibited in the PC district except by department stores.” The merchant who had opened a furniture store in the PC district then sued the city, arguing that the ordinance regulated economic competition, and violated the equal protection clause of the federal and state Constitutions. The lower court ruled against the plaintiff, noting that the purpose of the ordinance was not to limit competition, but to preserve the vitality of the Hanford downtown district. The court said that treating large stores differently than smaller stores was not a violation of equal protection, because the city was trying to lure big stores to the PC district. The merchant appealed this ruling, and the Court of Appeals sided with the merchant, saying that limiting furniture sales to stores in excess of 50,000 s.f. in the PC zone was arbitrary, and “a rational relationship between the size classification and the goal of protecting downtown simply does not exist.”
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Topics: Lawsuits | Zoning Regulations
Posted by Al Norman on Monday, June 11, 2007 | Permalink
Cedar Hills, UT. City “Shocked” As Wal-Mart Guts Agreement
On January 8, 2004, Sprawl-Busters received a report from residents in Cedar Hills, Utah who said they had successfully lobbied their city council, and won a unanimous rejection of a Wal-Mart supercenter. “They indicated that they won’t be back,” the residents said at the time. But like a bad penny, Wal-Mart always turns up. In fact, Wal-Mart did return, and on May 15, 2007, the city council voted to approve a 133,5000 s.f. Wal-Mart supercenter-—subject to final terms of a developer’s agreement.
This week the Daily Herald newspaper reports that Wal-Mart and city officials in Cedar Hills have been in negotiations for years---but those talks seem to have gone south. The Herald reports that Wal-Mart’s superstore plans are “in trouble,” because the retailer has refused to abide by the city’s development agreement. Wal-Mart reportedly deleted parts of a proposed agreement the city considers non-negotiable. “Whole sections have been removed,” said one Councilman “We are talking huge, sweeping changes. The council is not prepared to adopt this, or anything substantially like it.” A Wal-Mart spokesman said the city’s requirements had created “heartburn and resistance” at Wal-Mart headquarters. City Council members told the media they were “shocked” to discover this week that Wal-Mart had scratched out more than half of the city’s requirements for the new store—with no explanation. “This is a little bit surprising, shocking—unbelievable might be the word,” said another Councilman.
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Topics: Comprehensive Plans | Zoning Regulations
Posted by Al Norman on Thursday, June 07, 2007 | Permalink
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