Friday Blog Round-Up: Rainy Day Edition
From Flickr user yarnzombie via Consumerist.
After the jump, tax stimulus packages, Wal-Mart’s green plans and in this week’s round up of Wal-Mart blogging.
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Posted by Alex Goldschmidt on Friday, May 09, 2008 | 20 comments | Permalink
Wal-Mart’s Achilles’ Heel
This story from Utne Reader explains why big box retailers won’t take over the economy - and it’s NOT because their prices are too low. Rather, the author explains, people’s tastes are too varied for any big box store to truly win the retail competition. The story cites Wal-Mart’s foray in Germany as one example of this weakness:
The inability of many big-box retailers to adapt to local tastes and their failure to anticipate technological market shifts has been their Achilles heel. When Wal-Mart was forced to shutter its German stores, a mystified company spokeswoman told a reporter, “We thought everyone around the world loved Wal-Mart.” (The International Herald Tribune quoted a baffled Wal-Mart shopper in South Korea, where the company has also abandoned operations, wondering, “Why would you buy a box of shampoo bottles?”) The chain had made the mistake of assuming that full-spectrum retail dominance is achieved by virtue of size alone, without regard to cultural and regional difference.
Author Michael C. Moynihan rightly points out that the life and death cycles of big retail chains have been evolving for over 100 years. As major retailers come and go, so too wane opposition groups and citizens brigades.
[S]tores like Wal-Mart will always be with us, just as they were when they were called Woolworth’s or A&P. If Sam Walton’s creation disappears, it will doubtless be replaced by a more clever, more modern adaptation of the business model he popularized.
Moynihan focuses on the aesthetic and feeling-based reasons for shopping locally, but fails to examine the potential national chains have for changing the dynamics of U.S. working life. Every time Woolworth’s or GM improved their business practices, the entire U.S. economy was lifted towards better working conditions and better pay. As Moynihan points out, Wal-Mart is only the latest in a long line of national retail chains, and like its predecessors it has the ability to change the economy for the better.
Posted by Alex Goldschmidt on Friday, May 09, 2008 | 12 comments | Permalink
Wal-Mart and the “Free” Market
Think Wal-Mart’s the epitome of a functioning free market? This article from Forbes argues otherwise.
The big buyers and sellers tend to throw their weight around. Some have deeper pockets. Some devote more time and resources to getting better information, or lobbying to keep protective barriers in place. Otherwise, there would be no need for laws proscribing trading on insider information, monopolies and bribing rule makers and lawmakers.
Yes, The Market’s Unfair [Forbes]
Everything you’ve heard about the virtues of competition in markets--and about how supply and demand work in concert to set the proper prices for goods, services and securities--is irrelevant. There are no perfectly functioning markets outside of the imaginations of economists.
In a perfect market, no buyer or seller should be able to set prices. In practice, this happens all the time. OPEC has near unilateral power to set oil prices because its members control so much of the world’s oil reserves. Wal-Mart, as a large buyer of manufactured goods, has vast power over its suppliers and can force them to lower prices. Proposals that the U.S. government should buy medicine in bulk from the drug companies, leveraging the purchasing power of everyone on Medicare and Medicaid, frighten the entire pharmaceutical industry. Buyers can exert monopoly power too, when they’re large enough.
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Posted by Research Team on Friday, May 09, 2008 | 9 comments | Permalink
Wal-Mart Bemoans the “Paycheck-to-Paycheck” Economy It Helped Create
Eduardo Castro-Wright, Executive Vice President of Wal-Mart Stores USA, went on the record today bemoaning the current state of the economy. “As money gets tighter for [low-income Americans] toward the end of the month, sales drop,” he said. The sad irony? Wal-Mart’s labor practices have greatly contributed to problems Castro-Wright complains about. Wal-Mart refuses to pay a living wage to over a million U.S. store employees, yet complains when the working poor’s paycheck cycles result in lowered sales. If Wal-Mart wants to see end-of-month sales rise, maybe it should consider paying its employees enough to get through all four weeks.
Wal-Mart: More shoppers are living paycheck to paycheck [Fortune Daily Briefing]
Wal-Mart (WMT) said sales in established stores rose 2.6% from a year ago in April, as shoppers scooped up the chain’s grocery, health and wellness and entertainment offerings. Wal-Mart cited strong sales of flat-panel TVs, video games and gaming systems, even as it warned that consumers are showing signs of being tapped out.
“The economy continues to get tougher and the ‘paycheck cycle’ is more pronounced for customers than in past months,” U.S. stores chief Eduardo Castro-Wright said. “As money gets tighter for them toward the end of the month, sales drop more than we have seen in the past.”
The company said it expects to report sales for the first quarter ended last month of $94 billion, which is above the $92.5 billion analyst estimate. But Wal-Mart said May sales growth will depend on how consumers respond to the government’s fiscal stimulus plan, which has many Americans getting checks this spring. The company said it expects same-store sales to be flat to up 2% for the month. Shares of Wal-Mart, which have risen this year as signs of economic distress have mounted, rose 1% in premarket trading.
Posted by Alex Goldschmidt on Thursday, May 08, 2008 | 37 comments | Permalink
The Lies Wal-Mart Tells: Wal-Mart’s Expansion Practices
Wal-Mart spends millions of dollars each year on public relations hoping to counteract the negative impact the company’s business practices have on its reputation. In the process, Wal-Mart’s representatives misrepresent the company, even lying to protect its fragile reputation. In this series, we’ll be examining some of the most common lies the company tells - and truth behind the spin.
Lie #1: Wal-Mart Only Builds Stores in Communities That Want It
“If they don’t want Wal-Mart in their community, then just say it. Don’t hide behind all this malarkey.” – Lee Scott [CNNMoney, 4/6/05]
“We have almost adopted the position that if some community, for whatever reason, doesn’t want us in there, we aren’t interested in going in and creating a fuss. I encourage us to walk away from this kind of trouble…Wal-Mart wants to go where it’s wanted.” – [Sam Walton: Made in America, 233]
The Truth:
Rapid City, South Dakota. Residents of the Enchanted Hills Subdivision as well as other residents opposed to a Wal-Mart development, hailed a Planning Commission decision to deny a rezoning request. It was their first victory in a long, long fight. Despite the setback, a Wal-Mart spokesperson said “…we’re still looking at that site as a possibility. No question.” Neighboring residents have objected to the project since it was first proposed in 2006. [Rapid City Journal, 2/27/08]
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Posted by Media Team on Thursday, May 08, 2008 | 26 comments | Permalink
Wal-Mart Shut Out Of Chicago
Today is a good day.
Huge news out of Chicago. Wal-Mart was shut down on its latest attempt to move into the city’s south side, and for the time being has abandoned its efforts to move into the Windy City, which is generally considered to be the nexus of its recent efforts to move into urban markets.
The company and the Mayor’s office might insinuate otherwise, but don’t be fooled - there is only one reason why Wal-Mart is not in Chicago today: low wages. A strong union presence and progressive city legislators in Chicago have organized over the past two year to introduce living wage proposals, which were never enacted - but effectively shut out Wal-Mart.
In recent months, the company has quietly redoubled its efforts to crack urban markets, after a growing consensus that they’ve already saturated rural markets. Although CEO Lee Scott famously declared “I don’t care” if Wal-Mart never opened a store in New York City, the company has been back at it lately in Chicago and D.C.
The simple fact is that Wal-Mart refuses to raise it wages - even by a small margin. Its current business model is dependent on cost-cutting at every corner - especially its employees’ wages and benefits.
As you’ve probably read here before, several studies have recently shown that Wal-Mart could easily raise its minimum wage - without a major impact on prices to most of its consumers. For a company that reported over $12 Billion in profits last year, and for a founding family worth over $80 Billion, this is an entirely reasonable and feasible goal.
Wal-Mart claims its average wage for hourly employees is around $10, but this figure is extremely hard to dissect considering all of the different positions and regional economies lumped in together. At Wal-Mart Watch, we repeatedly hear from workers who have been working at stores for five, ten or more years - and are still making under $10/hour. Forcing a loyal long-time employee to live in near poverty or on government assistance neither stimulates the economy or is responsible business. And it’s the reason you won’t see a supercenter in Chicago any time soon.
Way to go, Chicago. You’ve set a precedent that other cities can hopefully follow.
Posted by Eric Bull on Thursday, May 08, 2008 | 16 comments | Permalink
Wal-Mart Should Audit Its Own Buildings
Wal-Mart announced plans several weeks ago to conduct energy audits of several state capitols, and came out with MORE news today about the plans. While the company has enjoyed a lot of free publicity for these initiatives, the fact remains that over 7,323 Wal-Mart stores around the world are nowhere NEAR being energy efficient. The company would do better to send its auditors to its own stores before it tries to green state governments. These actions are another sad example of Wal-Mart’s desire to capitalize on green shoppers but failure to actually change its business practices. Like Magritte’s existentialist painting, a picture of a green company is not the same as a green company.
Wal-Mart selects 20 capitols for energy audits [Associated Press via Chicago Tribune]
Wal-Mart Stores Inc. has announced partnerships with 19 states, including Iowa, and Puerto Rico to help them save on energy and electricity costs at their capitols.
Wal-Mart will identify engineering experts to perform energy audits at the capitols.
Wal-Mart over the past three years has worked to cut down on energy usage at its stores and suppliers. Through its Greening State Capitols partnership with the National Governors Association, Wal-Mart will offer its services in an outreach effort and to market its audit services.
The states included in Tuesday’s announcement are Arkansas, Connecticut, Florida, Iowa, Kentucky, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Virginia and West Virginia.
Posted by Enviro. Team on Wednesday, May 07, 2008 | 6 comments | Permalink
Wal-Mart Still Won’t Respond to Toxic Flip Flop Complaints
It’s already been almost a year since Kelly Stiles got chemically burned from a pair of $3 flip flops she bought at Wal-Mart, and the company STILL hasn’t responded. Kelly wasn’t the only one who got burned, either. After going public with her complaints, Kelly got dozens of responses from other people with identical burns. Despite the obvious problem, Wal-Mart has never responded to Kelly’s complaints. The company never recalled the flips flops, and never addressed the underlying issue of poor manufacturing.
1 Year Later: Feet Scarred From “Chemical Flip Flops,” Walmart Still Not Talking [Consumerist]
It’s been about a year since Kelly Stiles’ feet were (somehow) injured by a $3 pair of Walmart flip flops. In that time, Kelly says her feet haven’t fully healed and she still can’t wear sandals or flip flops. She says she still has pain where she was injured.
Walmart is saying nothing at all, although Stiles says that of the 200-350 people who contacted her after she posted photos of her “burns” on the internet, a few have “settled with Walmart for undisclosed amounts.” The retailer has pulled the flip flops in question from store shelves, but they do still sell shoes from “chemical flip flop” manufacturer.
Kelly told WCSC, “So far I have been contacted by no less than 200 hundred and I think no more than 350 people who have said you know I had the same thing happen.”
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Posted by Alex Goldschmidt on Wednesday, May 07, 2008 | 6 comments | Permalink
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