Wal-Mart Fails to Innovate, Relies on Price Cuts to Save the Holidays
Wal-Mart Playing Value Card for Yule [Women’s Wear Daily]
Wal-Mart Stores Inc. is retailing’s Goliath, but this holiday season the company is scrapping like a flyweight for every dollar.
Inventory is lean, fashion has been curtailed in markets that don’t respond to it, and given more support in markets that do. The company has strengthened regional assortments, and the overarching message is Christmas — writ large.
“Mr. Simon is dedicated to executing the Christmas shops...he knows he’s accountable,” said H. Lee Scott, president and chief executive officer, teasing Wal-Mart U.S. chief operating officer Bill Simon’s top priority during a presentation to financial analysts in October.
Wal-Mart knows it all comes down to price, and on that score, the $345 billion retailer is formidable.
On walmart.com, for example, shoppers can purchase a $10 organic cotton-cashmere blend sweater and have it shipped for 97 cents. In stores nationwide, Wal-Mart is delivering on a goal to offer at least 10 different apparel items in each department, priced at $10 or less.
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Posted by Alex Goldschmidt on Thursday, December 20, 2007 | 3 comments | Permalink
SEIU Matches Wal-Mart Watch’s Donation to Former Wal-Mart Employee Deborah Shank
The Service Employees International Union (SEIU) today matched Wal-Mart Watch’s donation to former Wal-Mart employee Deborah Shank. Together with an online fundraiser, a total of over $15,000 will be donated for her future medical care.
A November 20 Wall Street Journal article entitled “Accident Victims Face Grab for Legal Winnings” brought Mrs. Shank’s story to national attention. When she was left brain damaged after a tragic collision with a semi-trailer truck seven years ago, her Wal-Mart health care plan paid her initial medical bills. After the Shanks collected a modest settlement from the trucking company responsible for the accident, Wal-Mart successfully sued the Shanks to seize the funds - $470,000 to reimburse itself for the medical expenses, plus the company’s legal fees and interest. Wal-Mart’s lawsuit demands will completely drain the money set aside in a trust for Mrs. Shank’s future care and force her to rely on public assistance for her medical and living expenses.
“In this season of giving, Wal-Mart has the opportunity to grant the Shank family a holiday miracle,” said Andy Stern, president of the Service Employees International Union. “Wal-Mart should reconsider its decision to take back the money that Mrs. Shank would use for her medical expenses.”
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Posted by Alex Goldschmidt on Thursday, December 20, 2007 | 0 comments | Permalink
Wal-Mart’s Damage to Communities Far Outweighs Charitable Donations
Yesterday’s post on food banks raised the issue of Wal-Mart’s charitable donations and whether they actually benefit the community, but the question goes far beyond donations of food. Wal-Mart loves to be seen donating money to local charities, especially around the holidays. These donations, while perhaps beneficial in their own small way, don’t even begin to make up for the amount of resources and taxpayer dollars Wal-Mart drains out of local economies. For Wal-Mart, these donations are nothing but some cheap PR.
Wal-Mart lowers median wages, exports jobs, shifts company costs to taxpayers, and leans on public subsidies to make its billions. These costs far outweigh any local donation Wal-Mart has ever made.
Wal-Mart’s charitable donations continue to lag behind its close competitors, and the Walton Family itself is ranks only 37th on the list of generous donors. But perhaps more tellingly, is that Wal-Mart donates most to charities in its own best interest. From the National Center for Responsive Philanthropy:
“Behind the Wal-Mart facade, the goals of the company and the family have nothing to do with promoting the community’s or the public’s or even their customers’ interest. Instead, there is one goal, and that is to make one of the wealthiest families in the country even richer.
Wal-Mart’s donations to little league teams and nursing homes also pales in comparison to the company’s donations to non-profits, think tanks and individuals willing to lobby on its behalf or grant favors in return. In doing so, Wal-Mart buys the power necessary to continue harming communities and getting away with it. Think Wal-Mart’s generous? Maybe so, but only to itself.
Posted by Alex Goldschmidt on Thursday, December 20, 2007 | 16 comments | Permalink
What is Wal-Mart Thinking?
In November, Wal-Mart China’s procurement office made controversial headlines for laying off 10% of its workforce. Because the layoffs came just before the enactment a new labor law which would increase the rights of workers, there was much speculation that the cuts were an attempt to avoid rising costs. Wal-Mart’s public relations department immediately refuted the idea claiming the layoffs were merely part of a reorganization strategy.
While the intention and legality of Wal-Mart’s layoffs remain open for debate, a recent news article has added an interesting twist to the story: Apparently, part of Wal-Mart’s reorganization includes moving some of the China procurement office to Africa.
The Truth Behind Wal-Mart’s Layoffs: Procurement Might Shift to Africa [People’s Net]
According to our in depth investigation, Wal-Mart’s procurement center layoffs have an even more profound cause [than evading the new tax law]. One of Wal-Mart’s procurement employees exclusively announced that the procurement layoffs are part of an overall strategy adjustment due to rising manufacturing costs. Some of Wal-Mart China’s procurement maybe shifted to Africa.
Amidst Wal-Mart’s endeavor to expand in China (currently, one of its actually profitable ventures in Asia) Wal-Mart is facing resistance from local Chinese communities, Chinese suppliers, and an American public who is demanding safer goods.
If Wal-Mart wants to continue to grow in China (where local businesses are quickly picking up the pace), won’t moving operations to Africa hinder relations with the Chinese? Or is this move symptomatic of something greater…
Posted by Michael Mignano on Wednesday, December 19, 2007 | 24 comments | Permalink
Baptist Ministers Slam Wal-Mart
A new ad from Wake Up Wal-Mart features two Baptist ministers urging shoppers to demand better from Wal-Mart. Drawing on the strength of Christian communities, and the charitable spirit of the holiday season, the ads send home a striking message: Wal-Mart has the responsibility to do better by its employees and its communities. Click here to view the ad.
US pastors tell Wal-Mart to pay a ‘decent wage’ this Christmas [Christian Today]
A national television ad campaign in the US featuring two prominent Baptist ministers who call on Wal-Mart to give the gift of economic justice this Christmas was launched Monday.
“The Bible says, ‘To whom much is given, much is required,’” says the Rev Charles Foster Johnson, interim pastor of Immanuel Baptist Church of Nashville, in the television ad which is being aired across the country.
“Wal-Mart rakes in over $21,000 in profit every single minute. This Christmas, let’s make Wal-Mart be a better neighbour to us all.”
The ad is part of the third annual “Hope for the Holidays” campaign by WakeUpWalMart.com, which spent over $1.5 million in radio and TV ads to draw attention to the retail giant’s unique responsibility toward the communities it represents.
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Posted by Andrew Yonki on Wednesday, December 19, 2007 | 13 comments | Permalink
Wal-Mart Says “No” to Food Banks
Wal-Mart and supplier partner ConAgra donated approximately 85 trucks worth of food to food banks this week. This may sound substantial, but Wal-Mart is a major part of why food banks are short of food in the first place. In 2006, Wal-Mart stopped donating excess food to food banks, creating a nation-wide shortage. As a practice, the company continues to refuse to donate at all. To quote Wal-Mart spokes person Robert Mosby earlier this month:
But when it comes to excess or soon-to-expire perishables in its stores, Wal-Mart doesn’t allow food banks to make pickups. “Our current policy for food is to discard it, primarily for the safety of our customers,” Mosby said.
The company cites “customer safety” as its reason for destroying food, but liability avoidance and profit protection also come into play.
Wal-Mart’s policy change has been a huge blow to food banks. In addition to losing Wal-Mart’s donations, food banks also lost the donations of many local grocers who had strong ties to the community. When Wal-Mart enters a local market many small grocers with stronger ties to the community close their doors, and food banks loose these donations as well.
While a new Wal-Mart often means lost jobs and fewer small local businesses, those who are left behind struggle even more because community resources such as food banks also struggle in Wal-Mart’s wake. Food banks are dependent on grocers, and Wal-Mart’s one-time donations fall far short of redressing the harm its corporate practices inflict. Though Wal-Mart claims to care about its communities, the company’s practices make clear that it cares more about liability and profits and less about poverty and hunger.
Refusing to donate nearly-expired perishables to food banks creates unnecessary waste, increases the problems surrounding poverty, is unsustainable, and despite the company’s slogan it does not help people live better. When addressing the shortages of food banks and addressing the needs of such places, Wal-Mart needs to critically examine how its practices and policies contributed to these shortages.
Posted by Research Team on Wednesday, December 19, 2007 | 28 comments | Permalink
The Yin And The Yang Of Wal-Mart’s Environmental Campaign
Advertising Age has produced a pair of Top Ten Lists, revealing the ten who “get it” and the ten who merely “talk a good game” when it comes to environmental initiatives. Is it possible for one company to make both?
The answer to that question is YES. Wal-Mart is praised for its initiatives, its work with environmental groups, and the measure of national and worldwide attention the company has brought to sustainability issues simply by way of its size and reach.
On the other hand, Wal-Mart gets its hand slapped for having its own carbon emissions increase 9% in 2006 despite the stated goal of reduction, and for sending a full 2/3 of its 2006 campaign contributions to Congressional candidates who earned failing grades from the League of Conservation Voters. And a recent report claims that Wal-Mart’s “good wood” procurement policy is nothing more than a paper policy, with little bite.
Wal-Mart’s recently released sustainability report was welcomed with mixed reviews - Wal-Mart’s goals were generally applauded, yet many were disappointed by a report that, despite numerous delays, still suffered from a lack of any meaningful, measurable data. What would really help is if Wal-Mart were to provide transparency into the company’s environmental initiatives, and present a systematic and more detailed assessment of the company’s progress on its environmental goals.
The Green and the Greenwashed [Advertising Age]
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Posted by Corey Himrod on Wednesday, December 19, 2007 | 4 comments | Permalink
Wal-Mart Takes a Cue from Big Brother
If there is anyone left who still thinks of Wal-Mart as a small-town company, let ye be taught. An article from Conde Nast examines the company’s use of federal agents for its corporate security:
Ex-government agents appear to be Wal-Mart’s investigators of choice. The retailer has emailed job listings to members of the Association for Intelligence Officers as well as posted ads on its site seeking to hire “global threat analysts” with backgrounds in intelligence. The job description for the analysts, who would have reported to a former Army intelligence officer, entailed collecting information from “professional contacts” to gauge threats from “suspect individuals and groups.” In practice, their responsibilities would have extended to gathering information about Wal-Mart employees, suppliers, and customers; Wal-Mart monitors shoppers for suspicious or potentially criminal activity. A Wal-Mart spokesman said the company does not comment on security matters.
Posted by Alex Goldschmidt on Tuesday, December 18, 2007 | 20 comments | Permalink
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