The Wal-Mart Watch Blog
Marketing/Advertising

| Jun 29, 2009

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Bloomberg is reporting today that Wal-Mart and the U.S. Chamber of Commerce are among those opposing legislation that would allow the U.S. to cut off duty-free imports from factories in Pakistan and Afghanistan, if they fail to adhere to international labor standards on matters such as prohibiting forced labor and child labor. The bill, titled the Afghanistan-Pakistan Security and Prosperity Enhancement Act, is meant to help strengthen democracy in the two countries by creating “Reconstruction Opportunity Zones” and increasing their ability to export goods to the U.S. - and in return, it only requires that the countries make sure their factories are providing adequate working conditions.

Wal-Mart, however, is among those arguing that such labor restrictions would reduce any beneficial effect the legislation might otherwise have - and besides, if factories in Pakistan can’t export products to the U.S. because of labor and human rights abuses, Wal-Mart can’t then turn around and sell those products at their everyday low prices, right?

“Pakistan doesn’t have a good record in terms of child labor and the employment of women,” [Susan Aaronson, a professor at George Washington University in Washington who has written on trade and human rights] said. “This ensures the rule of law will be followed.”

The House bill states that each country “shall continue to receive duty-free treatment under this Act only if the President determines and certifies to Congress that Afghanistan or Pakistan, as the case may be has implemented the requirements set forth” - said requirements including insuring the following:

(A) compliance with core labor standards; and
(B) compliance with the labor laws of Afghanistan or Pakistan, as the case may be, that relate directly to core labor standards and to ensuring acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety.

We’ve already documented Wal-Mart’s sourcing issues in other international locales, so it shouldn’t be all that surprising that they would oppose such regulations here. Links to summaries of both the House version of the bill (with labor requirements) and the Senate version can be found after the jump.

Obama’s Bid to Boost Exports From Pakistan Hits Snag Over Labor [Bloomberg]

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| Jun 25, 2009

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We hate to say “I told you so,” but....

Marc Gunther on ClimateBiz discussed Wal-Mart on his blog yesterday, and points out something we’ve been trying to get across as well. Even as its greenhouse gas emissions have begun to fall, the company’s overall carbon footprint has continued to rise.

As Gwen Ruta of the Environmental Defense Fund, a Wal-Mart partner, writes in her frank assessment of the company’s 2009 sustainability report, the problem is that all the good things that Wal-Mart is doing—increasing its use of renewable energy, driving efficiency in individual stores, improving its fleet operations and pushing up its recycling rate—are offset by the fact that the company is adding more stores and selling more stuff.

In late 2007 we released our own environmental report, in which we brought up the following:

Wal-Mart’s new stores will use more energy than its energy-saving measures will save. Its fleet of trucks, massive overseas shipping to import its goods, and the increasing vehicle miles traveled by its consumers all contribute heavily to CO2 emissions and the number of ozone-causing particulates released into the air. Its huge stores and even larger parking lots contribute to the degradation of our water supply, affecting our drinking water and the viability of aquatic life.

Wal-Mart’s response has been that by increasing its market share, it can replace less efficient competitors and thereby reduce emissions in the retail sector as a whole, even as it continues to expand. That might ultimately be true in the far, far distant future, especially if one day every store is a Wal-Mart. But in the interim, Wal-Mart’s total carbon emissions continue to outpace its efficiency gains. And as Gunther so eloquently adds:

If the Earth’s atmosphere could speak, it would tell us that it doesn’t care about efficiency or renewables or recyling—or market share.

Wal-Mart’s Big Problem: Climate Change [ClimateBiz]

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| Jun 25, 2009

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We talked to you earlier this week about the complaint that Texas grocer HEB made against a misleading Wal-Mart ad that claimed the company saved families $700 dollars. On Tuesday, the Ad Division of the Better Business Bureau recommended that Wal-Mart pull the ad - and today we read that Wal-Mart has given in.

(**By the way, what happened to Wal-Mart claiming that it saved families $2,500 a year? Now they won’t even say $700?)

But what caught our eye this time wasn’t Wal-Mart’s dishonest ad. It was the 100+ comments on the story from the San Antonio News-Express (published at Chron.com) - and the anti-Wal-Mart fervor from readers deep in the heart of Texas.

It’s just an everyday reminder that strong feelings against Wal-Mart aren’t confined to big cities on the coasts.

| Jun 23, 2009

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That wheezing you hear...that unmistakable click of walking stick on linoleum...that is the sound of another beyond its prime musical act trying to climb the Wal-Mart stairs back to relevance (and more importantly, larger record sales).

You might of course remember exclusive deals with The Eagles, Journey, and AC/DC with its “Black Ice” album. The Boss, Bruce Springsteen, made a similar deal, only to prove that he really was “born to run”...as quickly as he could from a PR nightmare. Aerosmith too has (perhaps accidentally) acknowledged the possibility of a deal.

The list is distinguished...but wait...aren’t we missing something? Where is the glam rock? Where is the long, permed hair? The Star Trek inspired spandex jumpsuits?? The face-paint reminiscent of Japanese Geishas??? KISS!!!!!!! Fine...we can cross glam rock off the Wal-Mart list.

“We’re about four days from finishing the new Kiss album. Eleven tracks, and it IS everything I’ve told you. It IS classic. It IS all written within the band. And IT ROCKS BIG TIME!,” guitarist Paul Stanley writes...However, when Kiss do release their new album, it will apparently be a Walmart exclusive.

With regards to Kiss’s predecessors, only Springsteen and his blue collar legend status seemed to face significant backlash:

Facing accusations that he had sold out on his principles after decades chronicling everyday working struggles in songs such as Born to Run and My Hometown, Springsteen accepted that he should not have got into bed with the retailer.

For the most part, the rest of the deals appeared to be money driven, with bands looking to jumpstart aging fan bases. I think we can safely put KISS in this category as well. So good luck to them - hopefully they’ll be able to afford all the face paint they can handle.

Kiss “Days From Finishing” New Album, Walmart Deal In the Works [Rolling Stone]

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| Jun 22, 2009

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At the request of the H-E-B Grocery Company, the National Advertising Division of the Council of Better Business Bureaus undertook a review of certain Wal-Mart advertising claims. More to the point, the grocery retailer challenged Wal-Mart’s claims of “unbeatable prices” in addition to its ability to save its customers on average $700 annually if they spend $100 a week at the supermarket on select grocery items.

Specifically, the challenger noted that Wal-Mart does not honor advertisements that require a purchase in order to receive the advertised price or free product, “Buy One/Get One Free” advertisements, double or triple coupons or percent off advertisements, “misprinted” advertised prices, Internet prices or price matches based on other methods of proof, including sales receipts.

The investigation turned up good news and bad news for Wal-Mart. First, the NAD did support the claim of “unbeatable prices,” primarily because it argued that no retailer could be expected to list all limitations in its advertisements. The NAD did, however, suggest Wal-Mart “modify its advertising to make its disclosures substantially more clear and conspicuous in its printed and broadcast advertising and on its in-store signage.”

As for the claim of being able to the save families $700 per year, well, that didn’t go so well.

NAD further recommended that Wal-Mart discontinue the “$700 annual savings” claim. NAD noted that the claim suggests that the consumer watching the ad could save, on average, more than $700 a year by shopping at Wal-Mart. The use of the phrase “on average” does not temper the overriding message that the viewer – wherever he or she is located – can expect to obtain these savings.

In a statement, Wal-Mart stood by its findings, saying they were supported by an in-depth Global Insight study. This isn’t the first time the National Advertising Division has recommended that Wal-Mart discontinue misleading advertising. And as for Global Insight, let’s hold off on calling them a bastion of flawless methodology. That group’s methods have come into question more than once by organizations including the Economic Policy Institute.

Walmart’s unbeatable prices claim scrutinized [Greensboro News & Record]

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| Jun 18, 2009

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A new ad from Best Buy:

H/T Cnet news (headline: “Best Buy ad: Our people are better than Wal-Mart’s”)

| Jun 17, 2009

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It’s not often to read in the business press these days that Wal-Mart is having trouble growing. But Dow Jones reports today that Wal-Mart’s plan to conquer the grocery market has hit a roadblock.

Not only has Wal-Mart decided to put the brakes on its “marketside” experiment (as well as desperately rebranding it), but its “ambitious” relaunch of the Great Value brand has been delayed. The company was intending rerelease thousands of its in-house label products, and give them significantly increased shelf space - in order to better cater to cash-strapped customers. Unfortunately, it hasn’t been able to make that happen.

There are a couple points we might add.

That’s not the only reason Wal-Mart is having trouble growing its grocery share. Despite the recession and desperate local politicians, communities are still saying no to Wal-Mart. Over the past two years we’ve seen record breaking numbers of Wal-Mart projects fail. In the past two weeks the Wal-Mart Watch community has sent over 25,000 letters to the city council members of New York, Chicago and LA - urging them to stand to Wal-Mart. The bottom line is that Wal-Mart hasn’t done much to make it more palatable to the communities that have opposed it.

And along the same lines, it seems that a wholesale focus on cheaper, in-house products isn’t compatible with Wal-Mart’s push to retain higher income shoppers and move into higher income neighborhoods. On one hand, Wal-Mart is spending millions to make shoppers feel more comfortable with its produce and meat, and on the other hand its making a rush for the bottom with cheaper, Wal-Mart brand groceries.

As always, Wal-Mart wants to be all things to all people. It’s doubtful that it will work.

Wal-Mart Sees Delays In Its Plan To Become Bigger Grocer [Dow Jones via Wall Street Journal]

Wal-Mart Stores Inc., long a retail titan, is finding that being a grocery titan is a bit bumpier.

The retailer, which has been sailing through the recession - relatively speaking - on the appeal of its low-cost offerings, has fallen behind on the re-launch of its private-label Great Value brand and has put the brakes on any expansion for its small grocery stores.

The ambitious Great Value launch, which involves several thousand items, “has met with some delay,” Wal-Mart spokesman John Simley said.

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| Jun 08, 2009

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The Virginia Democratic Primary is tomorrow, and with it gubernatorial candidates on both sides of the aisle are making their views known on the controversial Battlefield Wal-Mart. This also comes just days before the Orange Planning Commission is scheduled to meet to consider the site developer’s request for a special-use permit for the 138,000-square-foot Wal-Mart store.

By now we all know that Wal-Mart wants to build a 141,000-square-foot supercenter on the edge of the Wilderness Battlefield National Park in central Virginia. The plan came under heavy opposition last year by several groups focused on everything from preserving the site’s historical significance to protecting the local environment. Collectively these groups have come to be known as the Wilderness Battlefield Coalition.

This past weekend, the Fredericksburg Free Lance-Star took a look at the positions of the Virginia gubernatorial hopefuls. Democratic candidates Creigh Deeds and Terry McAuliffe both are in favor of preserving the site, having sent letters expressing as much to current Wal-Mart CEO Mike Duke, with Deeds going so far as saying he felt an obligation to do so. Both of their letters echo the sentiments of preservation groups - that alternative sites exist that would allow Wal-Mart to build while protecting the sanctity of the Battlefield site.

Deeds:

“The opponents of the proposed project have identified [alternative] sites within two or three miles of the current site,” he wrote Duke. “With this compromise, we can continue to preserve the land and history of the Wilderness battlefield while still providing your company a location for a store.”

McAuliffe:

He asked Duke to “consider moving the Wal-Mart a little ways down the road so that we can preserve this historic site. The Wal-Mart you are building could potentially jeopardize the most popular tourist attraction in Orange County.”

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| Jun 01, 2009

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The New York Times takes an interesting look at a widespread move by companies to adopt a warmer, brighter and “fuzzier” logo in attempts to rebrand themselves:

Wal-Mart’s old mark was navy blue, but it felt Red State. The company has been under heavy attack for its labor and environmental practices, bruising its brand in bluer quarters.

A major image overhaul is under way, and a new logo is starting to appear across the country. The military-style Wal-Mart star has given way to a yellow twinkle that punctuates a new message: this is a company that cares, with fast and friendly service and a fresh, innovative outlook, according to Linda Blakley, a Wal-Mart spokeswoman.

Ms. Williams, of Wharton, said the softer Wal-Mart logo serves another purpose: to stand apart from the bright reds and louder typography of its main competitors, Kmart and Target. While Target’s design says bold and cutting-edge, Wal-Mart’s sends a signal that it is approachable and sincere, she said.

But what jumps out the most are the dead-on similarities between Wal-Mart’s and Kraft’s logo. Did they hire the same design consultants or what?

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| May 27, 2009

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“Underpaid, disempowered Wal-Mart employees have a tough time staying chipper these days — and they pass along their misery to the company’s customers.”

So begins the entry for Wal-Mart in Business Management Daily’s list of the five worst companies for customer service. In compiling its list BMD interviewed several sources, including Service Quality Institute president John Tschohl and David VanAmburg, managing director of the American Customer Satisfaction Index. The worst offenders, in order:

1. Bank of America; 2. Comcast; 3. ebay; 4. Wal-Mart; 5. U.S. Airways

So where exactly does Wal-mart come up short?

“Wal-Mart built its business on customer service, but they’re in the sink now,” Tschohl contends. “The stores are ugly, and they attract the people with the least amount of money who are willing to put up with bad service.” Adds David VanAmburg, managing director of the American Customer Satisfaction Index: “They are at the top of our list when it comes to value, but near the bottom when it comes to service.”

The key, of course, is that you would think this problem would have an easy solution. Treating your employees better through better wages, better/more affordable health benefits, consistent scheduling, ending discriminatory practices and pay theft...well, you get the picture...would all lead to a more content work staff. And what happens when you have happy employees? That’s right, happy customers.

“It’s a matter of treating your employees better than anybody else does and offering world-class customer service,” explains a manager of a Les Schwab Store in Concord, Calif. “That is what keeps your business growing.”

That will be something for Wal-Mart to keep in mind as the economy slowly rebounds. As more people return to their previous shopping habits - and more importantly, their previous shopping locals - Wal-Mart could see its sales figures returning to the flat numbers from pre-recession days. Is it really THAT hard to show your employees a little love??

Failing grades: The 5 worst companies for customer service [Business Management Daily]

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