The Wal-Mart Watch Blog
Food

| Feb 17, 2010

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The Shaw’s supermarket on Whalley Avenue in New Haven, Connecticut is closing down. It’s one of 18 stores that are being sold off by Shaw’s owner, SuperValu.

Most of the Shaw’s stores are being bought up by three other New England grocery chains, including Stop & Shop, ShopRite and PriceRite. The Shaw’s in New Haven doesn’t have a buyer yet. Wal-Mart is listed by Supermarket News as the largest grocery chain in the world. In America, Wal-Mart’s market share is in the mid 20% range for dry groceries, dairy and frozen foods.

Supervalu is listed as number 15 on the worldwide grocers list. Supervalu describes itself as a “mix of owned, licensed, franchised and affiliated stores, (which) serves millions of families from coast-to-coast.” The retail banners that Supervalu operates include: Acme, Albertsons, Bigg’s Bristol Farms, Cub, Farm Fresh, Hornbackaer, Jewe-Osco, Shaw’s/Star Market, Shop ‘N Save, and Shoppers. The company also controls the discount grocery chain Save-A-Lot.

The Shaw’s lineage goes back to 1860, when George C. Shaw opened his first store in Portland, Maine. A few years later, another native New Englander, Maynard A. Davis, opened his first Public Markets in Brockton and New Bedford, Massachusetts. These two stores merged, and today the Shaw’s/Star Market chain has over 30,000 workers in the six New England states---soon to be five states. The 18 stores being shut down represent around 9% of the 194 stores under the Shaw’s banner.

Supervalu as a conglomerate controls roughly 4,300 retail outlets in the United States. “We bring our national scale and local hyper-relevance to thousands of consumers, helping to make us ‘America’s Neighborhood Grocer.’” But in Connecticut, Supervalu is leaving the neighborhood.

According to the Hartford Courant’s account of the Shaw’s meltdown this week, the company had a 15 year track record in Connecticut, but had come under increasing pressures from competitors like Wal-Mart and Whole Foods. Today Wal-Mart has only 5 superstores in Connecticut, and 28 discount stores. But in 1994, just as Shaw’s was preparing to enter Connecticut, the state had only 2 Wal-Mart discount stores, and no supercenters.

A spokesman for Supermarket News told the Hartford Courant that Shaw’s had failed to differentiate itself. “They’ve had an inconsistent identity with the shopper. In order for a conventional supermarket to stand out, they have to be special, whether that’s local flavor or product or service offerings that are unique.” At their point of highest penetration, Shaw’s had 26 stores in Connecticut, but over the years they shut down 8 stores. A spokesman for Supervalu told the Courant, “While these decisions are always difficult given the impact on associates and customers, they ultimately allow us to operate more efficiently and effectively within a highly competitive retail environment.” That’s of little consolation to the workers who are losing their jobs in the middle of this recession.

What you can do: Many of the former Shaw’s stores will be unionized under their new owners. Brian Petronella, a spokesman for the United Food and Commercial Workers (UFCW) local 371, said 5 of the ShopRites will be represented by the UFCW. Local 371 will also represent the new Stop & Shop stores. The UFCW extended a hand to the Shaw’s workers who will work at ShopRite stores that are not unionized. “We will try to help those people get jobs at union locations,” Petronella told the Courant.

The demise of Shaw’s in Connecticut is just a continuation of the shift in market share towards the largest grocer in the world: Wal-Mart. In 2003, a study by Retail Forward, entitled “Wal-Mart Food: Big, and Getting Bigger,” pointed out that just ten or fifteen years ago, “Wal-Mart was barely on the food radar screen. Virtually overnight, the retailing behemoth has become the dominant grocer in America.” In 2003, Wal-Mart sales were bigger than the combined sales of the top ten U.S. supermarket retailers. “Wal-Mart has the proven ability to quickly blanket a market with its multi-format approach,” said Retail Forward, “to become a dominant---if not leading—market share player in rapid fashion, wreaking havoc for the incumbents.”

The latest incumbent is Shaw’s supermarkets. Seven years ago, Retail Forward predicted that “for every Wal-Mart supercenter that opens in the next five years, two supermarkets will close their doors. As a result, the supermarket industry is projected to lose 2,000 more stores over the next five years.” The consultant concluded that grocery stores can survive, but “the key is to be what Wal-Mart is not.” The analysts will say that Shaw’s failed to find a “distinct positioning strategy” that set them apart. But the fact is, the Connecticut market is saturated with grocery stores, and most of Wal-Mart’s stores still do not carry a full line of groceries--so the problem will get worse if Connecticut communities let Wal-Mart build more superstores.

Readers are urged to copy this article and send it to their local city or town officials with the following note: “When Wal-Mart files a proposal for a superstore in our town, please learn from the lesson of Shaw’s supermarkets, and understand that a Wal-Mart opening merely leads to to other stores closing. It does not happen overnight---but it happens---and when it does, people lose their jobs, and no added value comes to the local economy. It’s just an unproductive game of retail musical chairs, and shifting market share. Wal-Mart sales comes largely from other cash registers. If you understand that, then you behave differently when the superstore comes knocking on your door.”

| Aug 05, 2009

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When they’re not settling lawsuits, cutting employee benefits, and building on Civil War battlefields, Wal-Mart is targeting the profit margins of....adorable Girl Scouts.

Wal-Mart has decided to launch their own Great Value brand of the Girls Scout’s famous Thin Mint and Tagalong cookies.

Just a few day’s after Wal-Mart filed an injunction against a union in Canada for using blue ovals on their website, Wal-Mart makes a carbon copy of America’s favorite cookies and tries to pass them off as their own.

Wal-Mart has finally reached a new low, built a basement under it, and proceeded to dig toward China.

The story was originally addressed by an angry Girl Scout mother, CV Harquail, in her popular mommy blog Authentic Organizations, and was picked up by multiple publications. She writes:

When it comes to assessing whether an organization is authentic, whether it is trying to grow into something more or better, it is important to look at the organization’s actions in that area.

We should be looking at Wal-Mart’s sustainability efforts and encourage them when these efforts seem to demonstrate that Wal-Mart is keeping its promises.

But also, we should look at the organization’s behavior around the fringes, because it is this behavior that clues us in to whether the change effort is real, or whether the change effort is fake.

We’re sure Wal-Mart will try to spin this as some sort of lesson in capitalism for the aspiring young leaders of tomorrow.

Remember kids, this isn’t recess, it’s a recession.

| Jul 24, 2009

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What’s worse than finding a frozen frog in your food?

Finding half a frog.

That’s right, when Chastity Erbaugh came home to cook for her children, she was shocked to find part of a dead frog in the bag of frozen green beans she just purchased at Wal-Mart. After reporting the incident, Erbaugh’s local TV station, KLTV, notified local health officials who in turn submitted a report to the FDA regarding Wal-Mart’s health and food code violation.

After getting over the initial surprise, she said she got mad—mad at Wal-Mart, where she bought the retailer’s Great Value brand microwave in the bag green beans. She said no one called her even days after she reported the problem and calls to the corporate customer help line left her scratching her head. After the last call, Erbaugh said Wal-Mart said it would make up the whole episode by offering a coupon worth the value of the green beans that could only be redeemed for another Great Value product. Total value: $1.

One dollar? No apology? Now, that’s the Wal-Mart we all know and love.

It also sounds like neglecting food quality control has lost Wal-Mart at least one customer:

Erbaugh said she’s done with frozen vegetables and shopping at Wal-Mart for now—even though it is a closer and cheaper option than the other grocery stores in the area. She said she’ll drive right past the Wal-Mart to do her shopping until the mammoth company makes her feel like a valued customer after years of spending some $400 per grocery shopping trip there.

“I’m not going back – not anytime soon,” she said.

On the bright side, at least Erbaugh’s children have a good excuse never to eat green beans again. I wish I thought of that one as a kid…

16 comments | Mar 19, 2009

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A federal judge in Nevada has halted a class action against Wal-Mart and dog food manufacturer Menu Foods before it even had a chance to begin. His ruling held that the need for individual factual inquiries made a class action untenable. This isn’t completely surprising - the lawsuit was filed based on deceptive trade practices and claimed Wal-Mart’s Ol’ Roy pet food products were misleading in their labeling in that they claimed to be made in the USA, when in fact many ingredients came from China. The Judge argued that this meant everyone in the class would have had to purchase the food based on the misleading labeling, something that would have to be determined on a case-by-case basis. You can read the entire court order here.

While the decision wasn’t surprising, the timing might have been:

The judge’s decision was unusual in that he denied class certification before any substantial discovery had been performed. Indeed, the court noted that so-called preemptive motions are generally disfavored, since “the shape and form of a class action evolves only through the process of discovery.” However, the court determined that the class was untenable as a matter of law, and “it would be a waste of the parties’ resources and judicial resources to conduct discovery on class certification.”

So, not only will the class action not move forward, but no discovery will be done unless individual cases are filed - which means many of the facts as to how we ended up with such a far-reaching pet food scare will remain a mystery until then.

The Ol’ Roy suit was originally filed in 2007 and eventually consolidated with a class action in New Jersey which alleged that tainted food distributed by Menu Foods and others led to the death of hundreds of pets. That action consisted of over 100 suits that grew out of the largest pet food recall in U.S. history, and settled in April of last year for $24 million. The Ol’ Roy suit, however, was severed from the Menu Foods action prior to the settlement.

Wal-Mart Cuts Class Off at the Pass in Pet Food Case [Law.com]

Read the rest of this story ...

15 comments | Mar 12, 2009

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A push to get rid of wilted lettuce and rotten tomatoes is paying off for Wal-Mart, despite a grocery business that continues to score low in customer satisfaction. From Bloomberg:

Wal-Mart plans to advertise its produce in coming months to win over more customers after efforts to tidy displays, buy food locally and automate purchasing, executives said in interviews last month at the company’s headquarters in Bentonville, Arkansas. Groceries account for more than 40 percent of sales at Wal-Mart’s U.S. stores and have outpaced the growth of most other products in the past year.

Despite the fact that Wal-Mart has undoubtedly prospered during our country’s economic...ummm...struggles, the perception of the quality being sold there remains low. In fact, on the American Customer Satisfaction Index posted by the University of Michigan, Wal-Mart consistently ranks at the bottom.

Customer ratings on meat and produce have trailed the rest of the store, said Bill Simon, Wal-Mart’s chief operating officer for U.S. stores...In terms of customer satisfaction, Wal-Mart’s grocery business ranked worst in the fourth quarter compared with six major supermarket chains, according to the University of Michigan’s American Customer Satisfaction Index.

What this doesn’t bode well for is Wal-Mart maintaining its market share once the economy turns around. Indeed, Wal-Mart sits at a 68% satisfaction rate, 8 points behind the average supermarket score and over 4 points behind Wal-Mart’s own score from a year ago. If that continues, could an uptick in economic fortunes see shoppers returning to their old grocery shopping habits?

So, are we happy that Wal-Mart is trying to upgrade the quality of its produce? Or perhaps the better question to ask is, should we be concerned about the reasons why Wal-Mart needs to upgrade its produce in the first place? Couldn’t they have tried to avoid sub-standard produce right from the beginning? Beverly Crisp, a shopper interviewed by Bloomberg, was surprised on her most recent shopping trip that Wal-Mart’s grocery aisles weren’t “the mess” they had been previously - if that’s the general consensus among shoppers, Wal-Mart is going to need more than just new broccoli to fix its image.

Wal-Mart’s Push for Fresher Broccoli Boosts Revenue [Bloomberg]

Read the rest of this story ...

3 comments | Nov 03, 2008

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If you thought you missed your opportunity to purchase melamine tainted GeGeDa brand eggs, fear not!  The eggs, which had been previously removed from Wal-Mart’s shelves in China, are back on sale!  And that’s not all!  To promote sales, Wal-Mart is selling GeGeDa brand eggs for half off!  That’s one sure way to “save money” and “live [hopefully] better [with melamine related health problems]”.

Wal-Mart claims the eggs have been tested and do not contain melamine.  Cautious consumers, however, aren’t buying it.  “Didn’t they already pulls these from the shelves?” one customer queried?  “How can they still be selling these!” exclaimed another.  According to reports, Wal-Mart is the only store selling the eggs on discount.

It’s no wonder Wal-Mart ranks last among Chinese supermarkets for food safety.

51 comments | Oct 31, 2008

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue begins on Wal-Mart and the economy, and whether Wal-Mart sales statistics can be used as a new barometer for the U.S. economy. You’ll also find stories on changes in shopper behavior, now that consumers are faced with less disposable income. And, you’ll find stories on Wal-Mart’s slowed growth, and the switch to smaller store formats by retailers across the country.

In addition to the economy, you’ll find stories related to next week’s election. Barack Obama highlighted the story of a 72-year-old man forced to go back to work for Wal-Mart in his half-hour special this past Wednesday night. Meanwhile, according to Reuters Wal-Mart vows to remain non-partisan in the 2008 election season, while the Financial Times reports on the candidates attempting to woo the so-called “Wal-Mart Moms.” Plus, there are suspicions that Wal-Mart is behind a new grassroots group recently set up to fight the Employee Free Choice Act, as reported in The National Journal.

Also: Find out whether a Wal-Mart case in Montana could lead to changes in that state’s campaign finance law.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. A California ballot measure could lead to increased demand for more humane animal products, while citizens in Virginia continue to fight Wal-Mart’s attempt to build near an historic Civil War battlefield.

Wal-Mart Watch Weekly Update for Elected Officials [October 31, 2008]

1 comments | Oct 23, 2008

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue begins with news of Wal-Mart’s closing of a Quebec Tire and Lube Express, just two months after workers there won a precedent-setting collective bargaining agreement. The move has been wildly denounced, although Wal-Mart officials maintain that Wal-Mart is not anti-union. Following up on that, BloggingStocks.com asks whether it’s wise that the retailer would rather see an operation shut down entirely than have employees with any kind of power.

In addition, the Hartford Courant has been following an issue in Connecticut - it seems the CT Consumer Protection Department will review Wal-Mart’s double tax policy to see if it violates state tax law. And on the International side, read more about Wal-Mart’s new green store in Beijing, China, and how the retailer is claiming it will toughen standards on its Chinese suppliers.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe.

Wal-Mart Watch Weekly Update for Elected Officials [October 22, 2008]

2 comments | Oct 17, 2008

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Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.

This week’s issue centers on a new website launched by Wal-Mart Watch which details the retailer’s political contributions, positions on specific legislation, and spending on lobbyists and industry trade groups. The website, Walton Influence, also includes similar information on the Walton family and the family’s related enterprises.

In addition, you’ll read about a number of legal issues, the most important of which could be affecting the health of millions of Americans. Bloomberg News and the San Francisco Chronicle, among others, are reporting on how tests of several of the best-selling brands of bottled water (including Wal-Mart and Sam’s Club private label brands) have been found to contain mixtures of at least 38 different pollutants, including bacteria, fertilizer, and industrial chemicals. These findings could result in a lawsuit against the retail giant.

And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. You’ll read about how Maryland’s closing of certain corporate tax loopholes has resulted in millions of dollars in increased state funds, and why employees in Illinois are protesting Wal-Mart’s electioneering activities.

Wal-Mart Watch Weekly Update for Elected Officials [October 16, 2008]

34 comments | Oct 07, 2008

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This video from the Financial Times takes a look at Wal-Mart’s new small-format Marketside stores, and their close competitor Tesco’s Fresh & Easy. The analysis of the two stores is interesting: Marketside looks more polished, whereas Fresh & Easy focuses on house-brand bargains. But the most interesting - and perhaps saddest - part of the video is hearing customers’ explanations of why they like the new small format stores:

“It’s kinda like a small grocery store,” one man says. “I kinda like the idea of the local markets instead of great big stores you’ve got eight million people in.”

That is, customers are attracted to these markets because they’re like the local grocery stores Wal-Mart so frequently puts out of business. After years of flocking to Supercenters, these consumers have realized the value of shopping close to home, though still seem unwilling to support real locally-owned businesses. Marketside has all the appeal of a local store with none of the benefits: money spent there doesn’t stay in the community and its owners have no incentive to treat employees well. Wal-Mart seems to be capitalizing on the very holes its own business model has left in the retail landscape.

Big box stores go small [Financial Times]

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