The Wal-Mart Watch Blog

2 comments | Jan 09, 2009

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Canada’s high court, looking festive after the holiday season, is back to its full compliment of 9 judges. The court has been a judge down for six months now, ever since the retirement of Judge Michel Bastarache. Thomas Cromwell, a Nova Scotia judge, will fill out the Court, which will return to session this month.

Among the cases on their docket? Weighing Wal-Mart’s claim that it did not close a Jonquière, Que., store in order to crush a fledgling union, an issue that came up again late last year.

Wal-Mart employees laid off in Jonquière in 2005 are to have their case against the U.S. retailer heard Jan. 19. The workers claim the giant retailer killed their jobs after they exercised their Charter right to organize themselves into a collective bargaining unit in 2004. Shortly after the workers certified a union to represent them – the first successful union drive at a Wal-Mart outlet in North America – the company closed the store, citing financial reasons, putting 190 employees on the street.

A loss for Wal-Mart certainly won’t look good for the company as it fights to slow progress of the Employee Free Choice Act south of the Canada border...meaning, here. As we noted a couple days ago, Wal-Mart already appears to be doing anything it can to resolve issues that might come back to haunt the company in the EFCA fight - such as settling its vast array of wage and hour cases.

Supreme Court set to tackle Wal-Mart case [Toronto Star]

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52 comments | Jan 08, 2009

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This morning, it was the news that rocked the financial world: Wal-Mart missed its sales estimates and cut profit outlook:

Wal-Mart, the world’s largest retailer, surprised investors who have seen it outperform rivals as the store of choice in a downturn. It said sales at U.S. stores open at least a year rose 1.7 percent, excluding gasoline—worse than Wall Street’s expectation of a 2.8 percent increase.

It also cut its profit forecast for its fourth quarter, which began on November 1.

As in the past, when sales take a dip in the winter, Wal-Mart blamed....the weather:

Vice Chairman Eduardo Castro-Wright said the company, which last month projected growth at the higher end of the quarter’s predicted 1% to 3% advance, said Thursday the holidays were more challenging than expected for retailers because of the economy and “severe winter weather” in some parts of the country.”

But the report this morning was a serious matter. It sent the market tumbling and others wondering if the retail sector would be able to recover at all any time soon. 24/7 Wall Street points out what some other stories seem to have missed - that for the first time in a while, Wal-Mart International has taken a hit as well:

Wal-Mart International has turned in sales improvement of 15% to 20% on a very consistent basis. In December of last year, that number fell by 10.4% to $10.7 billion. For the entire company, revenue was flat at $47.5 billion, which means that Wal-Mart US carried all of the load.

In many sales periods past, Wal-Mart has relied on strong international sales to boost the company while same store sales in the U.S. remain mostly flat. And Wal-Mart has made no effort to hide the fact that it is concentrating much of its projected growth in the international sector, while slowing down at home.

Make no mistake about it: Mike Duke has his work cut out.

11 comments | Jan 08, 2009

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On Monday, Lee Scott is scheduled to give the keynote address to the National Retail Federation’s (NRF) national convention. Afterwards, he’ll do a question and answer
session with the CFO of the NRF on Monday, and they’re looking for people like you to submit questions.

On February 1st, Lee Scott is out the door and will be replaced by Mike Duke. This is undoubtedly the last chance you’ll have for something like this. Let’s ask him about his record at Wal-Mart and ensure that he doesn’t get a series of softball questions.

Questions are due by tomorrow, and can submitted via the link above - which sends them to

Good luck, we hope yours gets picked!

6 comments | Jan 08, 2009

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UPDATE: We reposted this entry from September because the study below (claiming that Wal-Mart helps people lose weight) was linked to in the NYT yesterday, and because our buddy J.R. asked us about it. Unfortunately we haven’t been able to find a real smoking gun linking the researchers to Wal-Mart. The 2005 Company 990 form shows that Wal-Mart gave $2,000 to UNC Greensboro, and the company has also given at least $1,250 to the researchers’ alma mater, Washington University - that’s about all we could find.

But just like the rest of Courtemanche and Carden’s pro-Wal-Mart studies, its pretty hard to take this one seriously.

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When we first found this study from the University of North Carolina at Greensboro, we were sure we’d read the abstract wrong. Its authors - Charles Courtemanche and Art Carden - attest that shopping at big box stores makes you...thinner??

Now, anyone who’s ever been inside a Wal-Mart knows the retailer stacks its aisles full of the most over-processed, over-advertised, candy-colored foodstuff products known to man. So the idea that shopping at a Supercenter would improve eating habits seems unconvincing, to say the least.  Courtemanche and Caden don’t find concrete reasons for Wal-Mart shoppers’ weight loss, but offer the conclusion that customers use the money they save at Wal-Mart to buy pricier, healthier food.

Just as we were deciding to cancel our gym memberships and immediately go to the closest Wal-Mart store, we noticed that Charles Courtemanche has written about Wal-Mart before. In fact, his assorted studies prove - and this is not an exaggeration - that shopping at Wal-Mart will win you friends, improve your town, let you have more fun, and make you rich, all in ADDITION to shrinking your waistline. Finally! The answers to all life’s problems! If we didn’t know better, we’d say Wal-Mart made this guy up.

We respect the difference of opinions on many of the issues surrounding Wal-Mart, but until the retailer starts putting alfalfa sprouts at the end of the aisles, we’ll assume its customers buy health food just as much as junk.

The Wal-Mart Diet [Conde Nast Portfolio]

Despite numerous studies, economists don’t have a great explanation for the obesity epidemic. But even though we don’t know what exactly is the main driver behind the chunk-ification of America, we may be getting a better sense of what isn’t responsible.

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4 comments | Jan 07, 2009

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BUSTED!!!

Actually, as a recently joined member of Netflix, I have to admit I might not be impartial on this story. After all, they do deliver movies right to my door, allowing me to overcome my lifelong fear of video stores.

But that aside, the lawsuit appears to be some pretty serious stuff. From the Los Angeles Times:

The two companies agreed in 2005 that Wal-Mart, the world’s largest retailer, would close its online rental business and refer customers to Netflix, which would promote Wal-Mart’s DVD movie sales, according to the lawsuit filed in federal court in San Francisco.

Sounds like a case of a couple companies engaging in some “you scratch my back, I’ll scratch yours” behavior. The complaint suggests clandestine meetings, beginning with a dinner shared by Netflix CEO Reed Hastings and then-Wal-Mart.com CEO John Fleming in January 2005, in which discussions began as to how the two could reduce competition in the DVD sales and online DVD rental markets. You can check out the whole complaint here. Its like reading The Bourne Identity...if it was written by lawyers. Bland, legalese-loving lawyers. But seriously, it is pretty interesting, and at 24 pages its not tooooo long, so check it out.

Wal-Mart, Netflix sued over online video rentals [Reuters]

Wal-Mart, Netflix conspired to create monopoly, suit alleges [Bloomberg via Los Angeles Times]

Resnick v. Wal-Mart, Netflix (Complaint)

6 comments | Jan 07, 2009

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A pair of stories - infant formula in Texas and continuing tax issues in Connecticut.

First, from Texas. Texas Wal-Marts are asking customers to check the dates on any infant formula sold within the state, after the office of the Attorney General learned that the retail giant had been selling expired product. There doesn’t appear to be a lawsuit on the horizon...the AG’s office simply asked Wal-Mart to remove the expired formula from shelves, inform customers, and make restitution. That most likely means refunds, but state penalties are not out of the question either.

The second story comes from Connecticut, where the neverending double taxation story has gotten life breathed back into it yet again. Here is our most recent post on the subject. And this, from the Hartford Courant:

Sue Drobinski of New Britain says that despite Wal-Mart entering into an agreement to follow state laws on taxes involving even exchanges, its employees in New Britain are not following the law.

I sent her email to state Consumer Protection Commissioner Jerry Farrell Jr. this morning, who has responded that his legal department will contact Wal-Mart to bring up this and other similar complaints.

Read on for more on both stories…

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1 comments | Jan 07, 2009

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Something about oil not meeting viscosity levels? The report doesn’t pack a ton of information, however, it appears that Wal-Mart has been selling low-quality gear oil in violation of California law. You can check out the whole article below...In total, Wal-Mart has agreed to pay over $350,000 in civil penalties and attorney fees.

DA settles consumer protection lawsuit [Vacaville Reporter]

The Solano County District Attorney’s Office joined with DA’s in Napa, Monterey, Shasta and Sonoma counties to settle a consumer protection action against Wal-Mart and Warren Oil.

According to District Attorney Dave Paulson, the complaint alleged Wal-Mart and Warren Oil—the manufacturer of Wal-Mart SuperTech Gear Oil—sold gear oil that did not meet advertised viscosity levels, a violation of California law.

“Wal-Mart and Warren cooperated with prosecutors during the investigation and agreed to undertake additional testing procedures in order to comply with law,” Paulson announced Monday.

Some 5,000 bottles of the non-compliant gear oil were sold in California.

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0 comments | Jan 07, 2009

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Wal-Mart just announced Doug McMillan as its new CEO of Wal-Mart International. For the past three years, McMillan has served as CEO of Sam’s Club, and has long been considered a rising star at Wal-Mart. His big day comes on February 1st, when he takes over Mike Duke’s job - who’s moving up to replace Lee Scott as top dog at Wal-Mart, Inc.

According to his Wal-Mart bio:

In his 18 years with Wal-Mart Stores, Inc., McMillon has learned the business from the bottom up, holding leadership roles in all three operating segments —Walmart US, Wal-Mart International and Sam’s Club. He began his career as an hourly associate at a Wal-Mart Distribution Center in Northwest Arkansas, while he worked his way through college. In 1990, while attending graduate school at the University of Tulsa, he became a Buyer Trainee for Wal-Mart working in Store #894 in Tulsa, OK. He has served as a Buyer for Food and Candy, Ladieswear and Crafts; a Divisional Merchandise Manager for Home Furnishings and Infants and Toddlers; Vice President and General Merchandise Manager for Sam’s Club International; and Senior Vice President and General Merchandise Manager for Wal-Mart Stores, Inc. overseeing purchases for Toys, Electronics, Video Games, Photo, Sporting Goods, Stationary and Office Supplies.

Here’s a quick look at McMillan, from a 2007 interview with AOL Business:

Watch more ClipSyndicate videos on AOL Video

2 comments | Jan 06, 2009

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No longer will your tootsies be kept tender by Wal-Mart’s “all man-made” Tender Tootsie slippers. The main problem, apparently, is that while Wal-Mart advertises that its slippers use 100% man-made materials, it turns out that in reality those slippers are lined with real rabbit fur.

So, either Wal-Mart is claiming to be the inventor and subsequent mass-producer of the bunny, or Wal-Mart’s packaging is inaccurate. I say it’s a coin-flip, but either way the mass retailer and uber rabbit farmer has pulled all of its Tender Tootsie slippers from store shelves in Canada after the Animal Defence League of Canada discovered the products were incorrectly labelled and contained real fur.

Marley Daviduk, a spokeswoman for the Vancouver branch of the national organization, found the slippers while shopping last week and the Ottawa and Vancouver branches of the Animal Defence League immediately contacted both Wal-Mart Canada and the product’s London, Ont.-based importer. “I knew right away it was real rabbit fur, but it said on the tag that there were no man-made materials,” she said.

The slippers, manufactured in China, apparently slipped past Wal-Mart’s quality control despite the fact that the company states it has a strict no-fur policy. Maybe next we should start checking the fur coats, to see if, ohhh, perhaps a real mink got slipped in there every so often?

Wal-Mart pulls slippers after animal-rights group complains [CanWest News Service]

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3 comments | Jan 06, 2009

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Adding to what we discussed might happen in West Virginia, with that state lowering its corporate income tax rate, here are a couple additional nuggets we’ve found for your reading pleasure.

First, in Kentucky, State Reps. Bill Farmer of Lexington and David Floyd of Bardstown are suggesting that now is the time to eliminate the state’s corporate and individual income taxes. Its a funny suggestion on its surface, since, well, lots of states are having a hard time paying for much of anything these days. But there is a method to the madness, and here it is:

The legislation drafted by Reps. Bill Farmer of Lexington and David Floyd of Bardstown would replace the income tax by spreading the sales tax to a host of services that are currently exempt, including plumbing, roofing and other contracting work, and some consulting work. Another huge chunk of change would roll into the state’s bank account by charging 5 percent tax on rent paid for commercial — but not residential — real estate space, according to the 66-page bill.

Since Wal-Mart rents a lot of its properties to...wait for it...itself, could this mean Wal-Mart could potentially be taxed on its own rental fees? Possible, but there would be one sure tax Wal-Mart would have to worry about - under the proposal, Kentucky would collect taxes on charges that stores such as Kroger and Wal-Mart impose on product makers to have special displays at the end of their aisles. The legislation in question is viewed as unlikely to pass this session, but even Democrats in Kentucky have admitted the proposals are something to consider.

House Republicans draft tax reform proposal [Lexington Herald-Leader]

In North Dakota, Wal-Mart is lobbying hard for a bill to repeal a law that requires, with few exceptions, pharmacies be owned at least 51 percent by pharmacists. A repeal of that law would of course open the door for Wal-Mart and other chain pharmacies to waltz right in and start peeling off local drug stores.

Pharmacists and others called “North Dakotans for Prescription Facts” want the law retained, saying it will kill small town pharmacies and hurt personalized service. “North Dakotans for Affordable Health Care,” funded in large part by Wal-Mart and Walgreen’s, wants the law repealed.

N.D. legislative session will have plenty of bread-and-butter issues [Grand Forks Herald]

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