What’s Good for the Middle Class is Good For Wal-Mart

Last month, the Wall Street Journal exposed the fact that Wal-Mart was telling its employees to vote against the Democrats in November - fearful that a Democrat in the White House would pass legislation making it easier for workers to unionize. Today, an op-ed by Congressman Rahm Emanuel in the Wall Street Journal suggests that Wal-Mart’s potentially illegal activities may even be misguided. Emanuel suggests that Wal-Mart is ignoring the economic facts in advocating for Republicans, and has actually fared better under a Democratic administration.

The piece explains that the American middle class - Wal-Mart’s core demographic - has always done better under Democrat administrations. Supporting measures that bolster the working class - such as the Employee Free Choice Act, which the company warned against - would mean better living for Wal-Mart’s employees AND its shareholders. Such support might mean thinking outside the box for this notoriously Republican company, but Wal-Mart stands only to gain from such innovations.

Opinion: Wal-Mart Thrives When Democrats Are in Charge [Wall Street Journal]

Last month, reports surfaced indicating that Wal-Mart managers and department heads were holding meetings with associates and warning of dire consequences if Barack Obama is elected president.

Wal-Mart may have its political reasons to vote Republican, but if economics are the criteria, Wal-Mart should be rooting for a Democratic administration. Instead, the company whose television ads encourage you to save money and live better is ignoring the economic facts and backing Republican economic policies that have resulted in families losing money and living worse.

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Posted by Media Team on Friday, September 05 | 34 comments | Permalink

Wal-Mart draws a line between the company and its stores

A story out today from the Arkansas Democrat-Gazette helps to clear up some of the questions about Wal-Mart’s recent logo change. The article explains that Wal-Mart The Company will continue to use the current, hyphenated form of the logo but that Walmart The Store will use the fancy new non-hyphenated version. As if that weren’t confusing enough, the article explains that the ever popular “squiggly” will remain in the Wal-Mart cheer. Yes, questions of how to spell Wal-Mart’s name will now involve a lengthy existentialist examination.

Exactly why Wal-Mart feels the need to make this distinction - between “the company” and its stores - remains unclear. The company wanted a new look for its stores, but changing every instance of its logo might have proven too complicated. Wal-Mart is, after all, the world’s largest company. But the distinction also plays in to an issue we raised yesterday - Wal-Mart The Company is beginning to distance itself from its stores. The company’s new Marketside shops bear no mention of their Bentonville parent, and perhaps the hypen/no-hypen distinction plays in to that. Does Wal-Mart The Company exist separate from its stores? Can it ever?

‘Walmart’ new, but store’s familiar [Arkansas Democrat-Gazette]

Wal-Mart or Walmart ? That depends, the company says. With the June 30 announcement of its new, nonhyphenated store logo, “Walmart” started showing up in some of Wal-Mart Stores Inc. ’s news releases and other statements and has been appearing in its printed advertising and in-store signs since then.

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Posted by Alex Goldschmidt on Thursday, August 28 | 109 comments | Permalink

Wal-Mart: Always Low Wages, Always

Earlier today Wal-Mart, the largest company in the world by revenue, announced its earnings figures for the second fiscal quarter of 2008. Between April and June, the company earned a whopping $3.45 billion, and sold an almost unfathomable $101.6 billion worth of merchandise. Prospering as American consumers are forced to downgrade, Wal-Mart has been enjoying a rare window of prosperity in a declining economy.

The Walton family, which holds a majority share of the company’s stock, stand to profit greatly from Wal-Mart’s sales. The company’s stock rose $17 a share between November 2007 to June 2008, and with 43% of the company’s stock in its possession, this means the Walton family made around $29 billion off the stock price increase alone. Also standing to benefit is CEO Lee Scott, who earned a total of $59.8 million last year - 1646 times what an average Wal-Mart hourly employee earns annually.

Despite the company’s massive profits, Wal-Mart’s wages remain shamefully low. In fact, when accounting for inflation, wages for Wal-Mart’s hourly employees has actually fallen since 2004. Our newest fact sheet - “Wal-Mart: Low Wages, Always” - provides more details about the company’s efforts to keep wages low.

Wal-Mart depends on low wages to keep profits high, and the company is willing to go to extreme lengths to keep it that way. Wal-Mart’s recent anti-union propagandizing is just one such example, but it’s part of a larger, cohesive company policy to keep benefits poor and wages low. Learn more in our fact sheet: click here to download “Wal-Mart: Low Wages, Always.”

Posted by Research Team on Thursday, August 14 | 36 comments | Permalink

New Study Finds Wal-Mart’s Reputation Still Lacking

A new study out today from the Reputation Institute ranks the world’s largest corporations based on the overall trust, esteem, admiration and good feelings consumers have toward them. Unsurprisingly, Wal-Mart didn’t do so well. Despite being the world’s largest corporation, Wal-Mart didn’t even make the top 200 for most-admired global companies. Among the 150 U.S. companies included in the study, Wal-Mart came in at an embarassingly low 136, down from last year’s rank of 57. To put that in perspective, Halliburton came in last at 150.

Rankings like these expose a major weakness of Wal-Mart’s business model: treating people badly makes shoppers dislike you. R.I. explains why “good feelings” are important to a company’s bottom line:

Research shows that people act based on their feelings. They are more likely to buy the products of companies they trust, to work for the organizations they respect, and to recommend companies they like.

Which means Wal-Mart’s efforts to save money no matter what the cost are actually costing the company dearly. Wal-Mart’s business model involves skimping on wages and benefits but sinking millions of dollars in to marketing and PR, a method which is wearing thin. Studies such as this one reveal Wal-Mart’s strategy isn’t a long-term solution to the company’s environmental and labor problems. It’s not too late for Wal-Mart to improve its practices, but the company will have to start making comprehensive changes - not cosmetic ones.

Posted by Alex Goldschmidt on Friday, July 11 | 65 comments | Permalink

As working Americans suffer, Wal-Mart rakes it in

Wal-Mart, the largest company in the world for the second year in a row, announced a 5.8% rise in same-store sales for the month of June. Pinched by rising costs, more and more consumers are resorting to desperate measures...like shopping at Wal-Mart.

These sales numbers mean big profits for Wal-Mart executives and the Walton family, who collectively own the majority of Wal-Mart’s stock. Wal-Mart is doing so well, in fact, it’s bringing in more revenue than any other company on earth. Even the oil companies can’t keep up! Exxon-Mobile, Royal Dutch Shell and BP all trail Wal-Mart in the top five on Forbes’ list of the world’s largest companies. And Wal-Mart is light years ahead of its direct competitors - the Bentonville giant is the only retailer in the top 100 on Forbes’ list.

Despite these record earnings, Wal-Mart’s store employees and communities across America continue to lose out. Wal-Mart’s low wages, government subsidies and tax avoidance means little of these massive profits will find their way to working Americans.Change to Win put the situation in perspective:

Who’s losing out in this sputtering economy? Not corporate CEOs. Too many of them have made sure to secure a golden parachute for themselves—while their workers face soaring healthcare costs, foreclosures, and an uncertain future...America’s workers are putting in more hours than ever and still struggling to make ends meet. Meanwhile, corporate CEOs enjoy salaries 180 times higher than their average employees.

Paying workers better wages and providing better health care isn’t just generous - it’s good business. Wal-Mart might lose many of its current customers once the economy improves: the retailer has already seen the dangers of being seen as a “rock bottom retailer.” The company might retain these new customers when the economy improves, but ONLY if it makes real changes to its business practices. Wal-Mart and its employees can both win if the company plays its cards right. But marketing changes - like its new feel-good logo - are not the answer.

Wal-Mart June sales up; raises earnings forecast [Reuters]
Wal-Mart, Costco Sales Climbed in June on Tax Rebates [Bloomberg News]
Shoppers stimulate discount stores [CNN Money]
Some Retailers Get Sales Boost As Rebate Checks Reach Taxpayers [Wall Street Journal]

Posted by Alex Goldschmidt on Thursday, July 10 | 15 comments | Permalink

Wal-Mart All-Star Collectible Cards: Tom Schoewe, CFO

In the week that Wal-Mart announced a 5.8% rise in sales, was coronated largest company in the world AND inducted in to the Corporate Hall of Shame, it only seemed fitting to unveil our collectible card of the man who ~~made it all happen~~ made a really nice pie chart about it: Tom Schoewe, Wal-Mart’s Chief Financial Officer.

Schoewe graduated from Loyola University of Chicago with a bachelor’s of business administration degree in finance. In the early 90’s, Schoewe worked for Black & Decker, initially serving as VP of finance. Schoewe became Black & Decker’s CFO in 1993, the same year the tool company won Wal-Mart’s “Vendor of the Year” award. Schoewe joined Wal-Mart in 2000. According to Wal-Mart’s website, Schoewe “is responsible for treasury, tax, accounting and control, business planning and analysis, internal auditing, and several other key areas of the company. In addition, during June 2005, the lead financial executive in each of the operating segments (Wal-Mart, Sam’s Club, and International) began reporting directly to him.”

Thomas Schoewe is on the Board of Directors of Balfour Beatty Construction Group, Inc. and Centex Corporation.

Notable Stats:
Courtesy of BusinessWeek

2008 Salary: $740,000
Restricted Stock Awards: $4,039,849
Total Value of Options:$ 610,097
Misc. Compensation: $2,782,588
Total Compensation: $8,517,888

Be sure to collect all the Wal-Mart All-Star Trading Cards: check out the Susan Chambers card and Mike Duke card to complete your collection!

Posted by Alex Goldschmidt on Thursday, July 10 | 11 comments | Permalink

Wal-Mart Faces Massive Wage & Hour Suit in Minnesota

You gotta hand it to Wal-Mart: when that company does something, it does it all the way. While most companies couldn’t break the law two million times if they tried, Wal-Mart has managed to do just that - and that’s in Minnesota alone. A recent case found that Wal-Mart has violated Minnesota state labor law two million times by forcing employees to work without breaks and without full pay.

The judge in the case called Wal-Mart’s labor policies “dehumanizing and reprehensible,” reinforcing what labor activists have long maintained about working conditions in the company’s stores. As details of the case come to light, Wal-Mart’s mechanized stinginess leaves little room for sympathy and instead reveal just how coldly calculating the retailer can be. Reporters, labor activists and bloggers weigh in.

Always Low Motives. Always. [Condé Nast Portfolio]

A million violations here, a million violations there: Pretty soon they being to add up. What they’ve added up to for Wal-Mart is at least $6.5 million in damages—and potentially much, much more…

Even worse for Wal-Mart: This is only one of 70 similar cases pending in courts across the country.

King, for one, sounded unsympathetic. “Wal-Mart’s failure to compensate plaintiffs was willful,” he wrote in a 150-page decision. “Wal-Mart was on notice from numerous sources of the wage and hour violations at issue and failed to correct the problem.”

More after the jump.

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Posted by Alex Goldschmidt on Wednesday, July 02 | 7 comments | Permalink

Reading Between the Lines: Walmart’s “Refreshed” Logo

Rolling out a new logo can be a delicate time for brands - it’s a time of self-questioning and transition all-too-reminiscent of middle school. Sometimes companies (and their PR teams) say one thing, but really have a lot more on their mind. Portfolio.com’s Business Spin blog provides this helpful, insightful analysis of Wal-Mart’s new logo roll-out. The bottom line? “Don’t worry, we’re not abandoning our roots. We’ll still squeeze our suppliers like soggy dishrags.”

Parsing Walmart: This Is Not a Reaction [Portfolio.com’s Business Spin Blog]

After the news leaked over the weekend, Walmart confirmed that it will roll out a new de-hyphenated logo.

While most companies flog their make-overs, Walmart’s overly restrained release seems intended to tamp down any speculation that the company is struggling to find a new sweet spot, as competitors get increasingly efficient and Target’s model continues to pick up steam. Here’s the parse.

Walmart: Walmart U.S. Refreshes Stores’ Logo
Translation: We’re not changing our logo. We’re refreshing it.

Walmart: For the past two years, a customer focused transformation has been taking place in Walmart’s U.S. business.
Translation: We’ve pushed the price-as-the-only-differentiator model as far as it can go.

Walmart: Walmart’s U.S. locations will update store logos as part of an ongoing evolution of its overall brand…
Translation: It’s an evolution. The revolution didn’t turn out too well. And it’s definitely not a reaction to Target.