The Wal-Mart Watch Blog
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| 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.”

| Jan 08, 2010

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Walmart is looking to move in to North Adams, MA, and many of the residents there are not happy about it. They have formed a group called North Adams First. Here is the description of their group:

“North Adams First is an opportunity for community engagement around the opportunities and challenges that face North Adams, MA.  It’s a hopeful time for our city with the election of Mayor-Elect Alcombright and it’s also a very challenging one. “Together we will succeed” means that we all need to participate by contributing ideas and by participating in the process of shaping our city’s future.

Civic duty does not stop at the voting booth. Attend meetings, talk to your elected officials, write letters to the editor. Be civil and be a part of the process.

The proposed Super WalMart is a significant project and as citizens, we need to be informed of the real impact and how it will contribute to our success or impede it. People can have their own opinion but it’s important that we are civil to each other as we become informed and contribute to the conversation.”

They are asking interested folks in the area to come to the Planning Board meeting on Monday, January 11 at 6 pm at the North Adams City Hall to let the planning board know what you think of the proposed project. You can read more about the proposed North Adams Walmart project on the North Adams First webpage.

Interested in getting involved with North Adams First? Join their mailing list by emailing . You can also support them by joining their Facebook group.

| Dec 04, 2009

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Wal-Mart workers in Massachusetts are getting a ‘Christmas Bonus’ from their employer---but it’s actually money they rightly earned at work, but were never paid.

The world’s largest retailer has had its legal department working overtime this past year settling a stack of class action lawsuits over wage and hour issues brought by its current and former “associates.” But unlike Wal-Mart lawyers—who get paid for every hour they work---the lowly hourly worker at Wal-Mart often is not fully paid for ‘off the clock’ work, rest breaks, and meal breaks.

Last year at Christmas, Wal-Mart released a staggering list of 63 separate wage and hour lawsuits that had been settled by the company, at cost ranging from $352 million to $640 million, depending on various trial court approvals. One month later, in January of 2009, Wal-Mart announced another $54 million settlement in a case from Minnesota, followed later by a $172 million settlement in California.

In settling these cases, Wal-Mart tried to distance itself from its own past labor transgressions that led to all these class action lawsuits. Typical was Wal-Mart’s disclaimer after the Minnesota case: “This lawsuit was filed years ago and the allegations are not representative of the company we are today.” Wal-Mart went on the assert that “Our policy is to pay associates for every hour worked and to make rest and meal breaks available.” Yet the lawsuits kept coming.

This week, 87,000 current and former Wal-Mart workers were covered by the Massachusetts settlement. This agreement itself was a nail-biter, coming only days before the lawsuit was ready to begin trial in state court in Woburn, Massachusetts. The court was notified on November 29th that a settlement was being filed. The Baystate lawsuit charged that Wal-Mart forced its hourly workers to work off the clock, and denied them required short breaks. A lawyer for the workers explained to the media that the class of Wal-Mart workers covered in the settlement could get as much as $2,500 in earned pay and benefits, or as little as $400. How much a worker gets will be based on their number of years on the job.

One lawyer for the workers—in a tongue-in-cheek description---labeled this $40 million payment as a “mini-stimulus” package, as if Wal-Mart were imitating the Federal Government. When the workers finally get their money---after waiting 8 years since this case was originally filed---they will spend it in the local economy.

What you can do: As in past cases, Wal-Mart used the same weak defense of its actions. “Resolving these lawsuits is in the best interest of our company, shareholders and associates,” a Wal-Mart spokesman said. “These cases were filed years ago and the allegations are not representative of the company we are today.” The workers and their legal representatives were originally insisting on a settlement worth $50 million. But Wal-Mart balked at that figure, and the lead plaintiffs in the case, Elaine Polion and Crystal Salvas objected to the original Wal-Mart settlement, saying that only $20 million would actually be paid out by Wal-Mart---and a good portion of that would go to the lawyers. Polion and Salvas also charged that Wal-Mart had reached an agreement with lawyers who weren’t the plaintiff’s primary representatives.

In the end, the settlement was set at $40 million—and all of that money will get disbursed. As much as $15 million off the top could go to the attorneys in the case. “This settlement obligates Wal-Mart to pay a full $40 million, with no amounts reverting back to them in the event of unclaimed funds or otherwise,” said attorney Philip Gordon, one of the lawyers representing the workers. As in past wage and hour cases, Wal-Mart agreed to put in place better systems for recording worker’s hours, including a system that denies workers access to cash registers if they are not clocked in for work. The workers will also be able to phone a ‘hotline’ to anonymously blow the whistle on the company if rest breaks or meal breaks are skipped, or off the clock work takes place.

The total Wal-Mart settlements to date in these wage and hour cases has been estimated at just shy of $1 billion. By not paying its workers what they have rightfully earned, Wal-Mart helped its stockholders and Board of Directors to save money and live better. It also helped Wal-Mart to keep the prices of its cheap underwear low. But because of these settlements, Wal-Mart workers will live a little better-—if only for a few months until their back pay is gone.

Readers are urged to contact Wal-Mart media relations at 1-800-331-0085 with the following message: “Congratulations on settling another wage and hour lawsuit in Massachusetts. This is such a lovely Christmas present to your workers in the Baystate---knowing that after 8 years of litigation you have finally agreed to pay them for every hour worked. Now that you are prepared to pay their arrears, how about raising their wages for 2010, and giving them a health plan that has real value and is affordable?”

| Dec 04, 2009

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Continuing the series of settlements Walmart is making in class action lawsuits across the country, Walmart agreed to pay workers in Massachusetts $40 million for forcing employees to work off the clock, and skip lunch and other breaks. The settlement covers as many as 87,500 of its current and former workers. According to the Boston Globe story, the employees will get “between $400 and $2,500 depending on number of years worked, with the average worker receiving a check for $734.”

While this is, actually, a rather large sum for each employee, it is unlikely that it will cover the full extent of the back pay for many of the workers. The $40 million also doesn’t include any fines or compensation for Walmart systematically breaking the law.

It is truly unfortunate that Walmart gets away with breaking the law like this and suffering very few consequences. Walmart make around $13 billion in profits every year, so $40 million is just a drop in the ocean.

You can read the full article here.

| Oct 05, 2009

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Walmart has a rather seedy past when it comes to gender discrimination. The company has been sued by women who were systematically denied equal wages and promotional opportunities because of their gender. Their law suit is the largest class action case in the country and includes more than 1.6 million women. Imagine having to sue a company just to be treated fairly.

This is, of course, not the only example of gender discrimination at Walmart. Today, according to the Associated Press, “The highest court in Massachusetts has upheld a $2 million jury award to a former pharmacist at Wal-Mart Stores Inc. who claimed she was fired by the retail chain after asking to be paid the same as her male colleagues.” The plaintiff in the case, Cynthia Haddad, had worked at the Walmart store for ten years, and was not only discriminated against, but also fired for simply asking to be treated the same as everyone else. Imagine how hurtful it would be to find out that your employer was not paying you the same as your coworkers simply because of your gender. Now imagine that when you went to talk to your manager to fix the situation, they fired you. Talk about adding insult to injury. 

| Aug 10, 2009

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Well, well, well….so Wal-Mart has been saying they are not interested in New York City, but we knew better.  Just like we knew better when Lee Scott said he didn’t think New York City was worth the effort.  In an article published in Crain’s today (see below), Wal-Mart disclosed that they are officially looking for a site.  Wal-Mart Watch anticipated this and proactively mobilized New York City residents against the company earlier this summer, utilizing an argument framed in a fact-filled white paper.  The response was overwhelming.  More than 15,000 letters were sent to New York City Hall, saying no to Wal-Mart.  The campaign was so effective that many New York City Council Members responded.  For one example from Councilman David Yassky, click here.

We took this action because we knew Wal-Mart would be back on New York City’s doorstep because their economics have not changed since the day we started our campaign.  Wal-Mart NEEDS to get into America’s major urban markets.  Their limited profit margins and their need for constant growth demand it.  Sorry, Wal-Mart, not today.

[Crain’s New York Business, August 10, 2009]

More than two years after Wal-Mart’s bruised chief executive wrote off opening a New York City store as not “worth the effort,” the Arkansas-based giant is back in the hunt, scouting out potential locations.

Read the rest of this story ...

| Jul 02, 2009

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Here are what the voices on the Internet are saying about Wal-Mart’s support of employer-mandated health care...not surprisingly, it hasn’t taken long for most to deduce that Wal-Mart is hardly acting in an altruistic way.

Number one on Wal-Mart’s hit list? Easy. Target. Because small businesses would either be exempt from the mandate or face a less-strenuous requirement, it would be Wal-Mart’s large competitors (and more specifically those who have to this point been better at managing health care costs than Wal-Mart) that would feel the brunt of the hurt.

Jonathan Cohn at The New Republic:

I don’t want to make too much of this: Wal-Mart may chicken out once the specifics of an employer mandate end up on the table. Even if they don’t, they may not lift a finger to help. And, make no mistake, Wal-Mart is acting--as it always does--out of pure self-interest.

My undestanding is that, after all of these years, Wal-Mart has suddenly found itself in the same situation its competitors once did: Dealing with unpredictable health costs and facing new competition from businesses that have found ways to spend even less on employee health benefits. Is there some justice there? You bet.

Reihan Salam with the National Review:

There is another way of looking at this. As a large, powerful, deep-pocketed firm, Wal-Mart can sustain regulatory burdens that mom-and-pops and new entrants can’t. And so burdensome regulations are invariably Wal-Mart’s ally. Jonathan Rauch explained this dynamic brilliantly in his book Government’s End. It makes perfect sense for Wal-Mart to back a regulatory initiative that hurts its bottom line as long as it hurts its competitors more.

Megan McArdle for The Atlantic:

Wal-Mart is always going to have a seat at the table when employer mandates are discussed, because Wal-Mart is the nation’s largest private employer.  Target and Macy’s probably won’t have a seat at the table.  So Wal-Mart can influence the rules in ways that benefit Wal-Mart at the expense of the competition.

Jeffrey Young in The Atlantic:

Based on the axiom that nobody in business or politics acts strictly out of altruism, it’s safe to assume that Duke and Wal-Mart’s board of directors concluded that backing the employer mandate would provide the company with some kind of competitive advantage. When I originally reported the story, it wasn’t immediately clear to me what that might be, though I suspected it must have had something to do with Wal-Mart’s calculation of how much money the mandate would cost them relative to other retailers.

Michael Cannon, for the Cato Institute:

A couple of years ago, I shared a cab to the airport with a Wal-Mart lobbyist, who told me that Wal-Mart supports an “employer mandate.” An employer mandate is a legal requirement that employers provide a government-defined package of health benefits to their workers...But it all became clear when the lobbyist explained the reason for Wal-Mart’s position: “Target’s health-benefits costs are lower.”

I have no idea what Target’s or Wal-Mart’s health-benefits costs are.  Let’s say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000.  An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart.  But it would cripple one of Wal-Mart’s chief competitors.

U.S. Chamber of Commerce, quoted nearly everywhere (here courtesy again, of Mr. Jeffrey Young):

The U.S. Chamber of Commerce took a pretty nasty swipe at Wal-Mart when I emailed them for a comment. Here’s the statement the Chamber’s press office sent me, attributed to James Gelfand, its senior manager for health policy: “Some businesses make the decision to use the government as a weapon against their competition. We do not agree with this method.” Ouch.

| Jul 01, 2009

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This is it, so don’t get scared now.

The Orange County Board of Supervisors is set to make a decision once and for all on the fate of the Wilderness Wal-Mart - a public hearing has been scheduled for July 27th, which will be the last time the public (and Robert Duvall) will be able to make their opinions known before the board takes the matter for good. Note: As a Civil War vet, Robert Duvall can actually comment all he’d like.

What will they decide? Will Wal-Mart be allowed to desecrate a piece of American history? Will they be denied, and an alternate site be recommended?

There seems to be a divide between the County Planning Commission and Orange County residents - the Commission voted 5-4 last week to approve development on the Battlefield site, yet at previous public hearings, the majority of Orange County residents were against the project (by an estimated 2-1 margin). This public outcry, combined with the history of the land at stake, would make it seem appropriate that Wal-Mart would be eager for a compromise that would still allow them to develop in the area, if one were presented...but to this point, no dice. Which is why County Administrator Bill Rolfe believes it’s now up to the supervisors to make the “win-win” a reality.

“The question that begs to be asked is, ‘Why isn’t the county trying to broker a deal that keeps Wal-Mart in the county and moves it further away from the congressionally approved boundary line of the Wilderness Battlefield?’ Both would be in our best interest,” Rolfe wrote the Board of Supervisors in a June 15 e-mail...He noted two goals--that Orange enlarge and diversify its tax base, and not do anything that would “detract from the [Wilderness] battlefield as a tourism destination for our community.”

Rolfe went on to point out that the coalition of historic preservation groups currently fighting the Wilderness plan would appear to be amenable to a development located farther from the battlefield park. And it just so happens that just such a piece of land could be made available next to a nearby 51-acre retail development. The question is, will County Supervisors go for it, or will they doom the Wilderness Battlefield to witnessing another brutal defeat?

Seeking win-win in store debate [Fredericksburg Free Lance-Star]

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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 19, 2009

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As you know, the Wal-Mart Watch community in New York, Chicago and LA has been rising up to voice their opposition to Wal-Mart’s attempt to exand into their city urban expansion.

The response in the Big Apple has been particularly impressive. Well over 15,000 letters were sent to all 51 New York City council members from all five boroughs concerning the negative impact that Wal-Mart will have on New York City businesses and community culture.  Several of you have already sent in responses received from your NY councilmembers - who have enthusiastically supported you in your stand against Wal-Mart - and for Employee Free Choice.

Here are a few of your letters:

I understand that Wal-Mart is interested in opening stores in Manhattan at Union Square, in Chelsea, or along Sixth Avenue. I strongly oppose the opening of a Wal-Mart store in our city. We who live in New York City have no need for a retailer that pays low wages and fails to provide quality health care for its employees, driving them to the use of hospital emergency rooms, thereby contributing to the increase in the cost of health care for the rest of us. Wal-Mart’s cost requirements encourage the payment of low wages to the employees of its suppliers, thus allowing it to become an unfair competitor and leading to the closing of many of its local business competitors. These actions of Wal-Mart drain money from our communities. If the Employee Free Choice Act, currently in Congress, were passed, then, and only then, would the arrival of Wal-Mart on the scene in New York City make any sense.  Wal-Mart workers would then have a chance to bargain for fair salaries and decent benefits and working conditions.  And, Wal-Mart would be forced to compete on an even playing field with its competitors who often are products of the neighborhoods they serve. I hope you’ll do whatever you can to support this crucial legislation as it makes its way through Congress. In this way, you will protect our city and its workers.  And, perhaps, make it possible for a newer, kinder, better Wal-Mart to evolve.

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I’ve heard that Wal-mart might be opening a store in Union Square and I am absolutely appalled.  For starters, I’ve lived in the building directly across from the space, (old circuit city/ Virgin Mega store), for nearly 8 years.  Wal-mart is absolutely antithetical to what NYC is to me, not to mention as anti-nyc neighborhood as it gets.  We need more small businesses hiring people at respectable wages to boost the city, and the people living here.  Wal-mart certainly won’t help me, a tax payer paying directly into the district. I know my local bodegas, my local drugstore, my local clothing shops, my local specialty nooks. These places probably can’t compete with a place like Walmart.  I’ve already seen my favorite East Village bagel shop get muscled out by hot and crusty… And my favorite clothing shops muscled out by rising rent.  And these are the places that make NYC what it is, and bring people to live here, and tourists to visit.  That space in Union Square is PRIME location, and Union Square is the true heart of the city.  Fill it with Walmart, and you kill the heart of the city. Please.  I’m pleading with you, I voted for you, to give me my voice in matters such as these.  And right now, I’m asking you to use your power to oppose Wal-Mart. Thank you for protecting our city.

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