Wal-Mart Fined for Violating Clean Water Act
Puerto Rico: Wal-Mart to Pay Fine [Associated Press via Forbes]
Wal-Mart Stores Inc. will pay a fine and fund land preservation in Puerto Rico to settle a U.S. Clean Water Act violation stemming from excessive storm water runoff at a construction site, a federal official said Thursday.
The Bentonville, Ark.-based company was fined $24,000 for failing to prevent sediment from washing into waterways at a Wal-Mart Supercenter in Caguas, south of the capital of San Juan, said Alan J. Steinberg, the U.S. Environmental Protection Agency’s regional administrator.
The United States’ largest retailer will also provide $98,000 to preserve land in the San Juan Bay watershed.
A Wal-Mart representative was not immediately available for comment Thursday.
Posted by Enviro. Team on Friday, April 27 | 1 comments | Permalink
In Depth Issue 2: Sustaining Wal-Mart
Wal-Mart Watch In Depth this month examines Wal-Mart’s Sustainability - not only the company’s environmental initiatives, but also the long-term viability of Wal-Mart’s business model as a whole. Download the full report by clicking on the image at right, or visiting our Publications page, where you can also download our last issue as well.
Low Costs Versus High Wages?
Wal-Mart’s unsustainable business model has been in the news frequently as of late. In today’s issue of Forbes James O’Toole and Edward E. Lawler of Forbes discuss the long-term drawbacks of paying and treating employees poorly:
Although offering minimal wages and benefits is the most common way companies try to lower their costs, our recent study of American management practices reveals that such bottom feeding may not be the most effective strategy. In fact, low wages paradoxically generate a variety of negative employee behaviors that add to the overall cost of doing business.
Although managers rarely calculate these costs, they often turn out to be substantial. For example, employees at low-wage companies have significantly higher turnover rates than those at well-paying companies: Wal-Mart has nearly a 50% turnover rate, and at many fast food, retail and service companies, the rates are even higher. Researchers have computed the total costs of such turnover as the equivalent of one month’s salary for unskilled workers and more than a year’s salary for skilled ones.
This comes on the heels of this week’s BusinessWeek cover story which claims Wal-Mart is getting old - that it is using up its resources and aging in a way that other companies do not:
Wal-Mart was able to boost total U.S. revenues by 7.2% last year by opening new stores at the prodigious rate of nearly one a day. According to Wal-Mart CEO H. Lee Scott Jr., the company plans to sustain this pace for at least the next five years...Wall Street does not share Scott’s bullishness, to put it mildly. Wal-Mart shares are trading well below their 2004 high and have dropped 30% in total since Scott was named CEO in 2000, even as the Morgan Stanley retail index has risen 180%. “The stock has been dead money for a long time,” says Charles Grom, a JPMorgan Chase & Co. analyst.
Meanwhile, the underlying economics of expansion have turned against Wal-Mart, even as it relies increasingly on store-building to compensate for sagging same-store sales. On balance, the new Supercenters are just not pulling in enough sales to offset fully the sharply escalating costs of building them. Part of the problem is that many new stores are located so close to existing ones that Wal-Mart ends up competing with itself. All in all, the retailer’s pretax return on fixed assets, which includes things such as computers and trucks as well as stores, has plunged 40% since 2000.
From their supply chain to their employment practices, Wal-Mart is rapidly using up natural, human and economic resources.
Click here to download Wal-Mart Watch In Depth: Sustaining Wal-Mart (PDF) >>
Posted by Alex Goldschmidt on Wednesday, April 25 | 25 comments | Permalink
More Than Just Our Pets
It is estimated tens of thousands of cats and dogs nationwide died as a result of tainted food that had origins in China. But the truth is the poor regulatory environment for food products sourced from China may mean our fuzzy friends are the canary in the coal mine, and that our health and lives may be at risk as well from tainted products.
Today’s front page article of the Washington Post focused on the safety of our food supply. There was one particular passage though that while it did not address Wal-Mart specifically, did address Wal-Mart’s effect on suppliers:
The investigations are unearthing details of the food chain that were previously a mystery to most Americans, including the international dealings that determine how ingredients make their way into the food supply. U.S. companies are under relentless pressure to cut costs, in part from consumers who demand low prices, and obtaining cheap ingredients from China has become an important strategy for many of them.
The cold reality it is not consumers demand for low prices, but rather Wal-Mart’s push for global outsourcing to lower prices that has began to ripple into the food chain. Wal-Mart “always” pushes its suppliers to move as much of its production to China, no matter what the cost, be it to the American farmer, the health of consumer’s pets, or the health and safety of the consumer and their family. The consumer themselves buys these products with the assumption that they come mostly from domestic sources and that there is oversight by federal agencies to guarantee safety. However, as Wal-Mart pushes more food production outside of the United States, the ability of these agencies to produce meaningful oversight becomes limited in the era of free trade, and the public becomes exposed to the same risks that plagued the early industrial era in the United States. Many substances that have been effectively regulated out of the domestic food production, because of the health hazard they pose, may be finding their way back into our food supply through sourcing from China. In fact while our foodstuffs may be nicely packaged, with the increased outsourcing to China for production, we face the same risks documented in Upton Sinclair’s the Jungle, and the next national health crisis may not involve our pets, but rather ourselves.
Wal-Mart’s opposition to Country of Origin Labeling may in fact stem from the fact the public may become legitimately concerned about where their food originates. Since Wal-Mart has placed so much pressure on its suppliers to move food production to China, Wal-Mart may face a true backlash when consumers demand the food they buy is sourced where the safety of the food supply can be effectively regulated. Wal-Mart may say consumers are not concerned about where their food comes from, but the reality is they are concerned about whether their food is safe, and that is directly tied to where the food is coming from.
Posted by Research Team on Wednesday, April 25 | 10 comments | Permalink
Wal-Mart Tries to Polish its Image
Wal-Mart makes some gains by polishing image [Baltimore Sun]
Two years ago, Wal-Mart began a counterassault on its critics, launching a re-imaging campaign to thwart those who had successfully painted an unsavory picture of the company as an employer who didn’t treat or pay its workers well, among other things.
The world’s largest retailer embarked on a public relations blitz, introducing initiatives to portray it as more environmentally friendly, more in tune with the communities where it was building and as a better employer to its workers.
The strategy has succeeded in some areas, but the company remains a target of criticism on other fronts. And as Wal-Mart still struggles to prove to others that it has implemented changes that really matter, efforts to improve its image have taken on added significance during recent months as the company loses market share to competitors.
Wal-Mart reported its weakest sales growth in almost 30 years for 2006, something that analysts and consultants said is at least partly attributed to the drumbeat of criticism about its corporate image. “For too long a period they didn’t do a great deal with image competition, and as a result they have had some serious imaging problems,” said Eugene Fram, a professor at the University of Rochester. “They’ve had to take a different tactic than they did five or 10 years ago. They have to prove to their critics that they are working at it and that they are changing.”
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Posted by Alex Goldschmidt on Tuesday, April 24 | 7 comments | Permalink
Wal-Mart’s Growing Pains
Wal-Mart’s Midlife Crisis [BusinessWeek]
John E. Fleming, Wal-Mart’s newly appointed chief merchandising officer, is staring hard at a display of $14 women’s T-shirts in a Supercenter a few miles from the retailer’s Bentonville (Ark.) headquarters. The bright-hued stretch T’s carry Wal-Mart’s own George label and are of a quality and stylishness not commonly associated with America’s über-discounter. What vexes Fleming is that numerous sizes are out of stock in about half of the 12 colors, including frozen kiwi and black soot.
Fleming may be America’s most powerful merchant, but a timely solution is beyond him even so. Wal-Mart failed to order enough of these China-made T-shirts last year, and so they and other George-brand basics will remain in short supply in most of its 3,443 U.S. stores until 2007’s second half, depriving the retailer of tens of millions of dollars a week it sorely needs. “The issue with apparel is long lead times,” says the quietly intense Fleming, who spent 20 years at Target Corp. (TGT ) before joining Wal-Mart Stores Inc. (WMT ) “We will get it fixed.”
For nearly five decades, Wal-Mart’s signature “everyday low prices” and their enabler—low costs—defined not only its business model but also the distinctive personality of this proud, insular company that emerged from the Ozarks backwoods to dominate retailing. Over the past year and a half, though, Wal-Mart’s growth formula has stopped working. In 2006 its U.S. division eked out a 1.9% gain in same-store sales—its worst performance ever—and this year has begun no better. By this key measure, such competitors as Target, Costco (COST ), Kroger (KR ), Safeway (SWY ), Walgreen’s (WAG ), CVS, and Best Buy (BBY ) now are all growing two to five times faster than Wal-Mart.
Wal-Mart’s botched entry into cheap-chic apparel is emblematic of the quandary it faces. Is its alarming loss of momentum the temporary result of disruptions caused by transitory errors like the T-shirt screwup and by overdue improvements such as the store remodeling program launched last year? Or is Wal-Mart doing lasting damage to its low-budget franchise by trying to compete with much hipper, nimbler rivals for the middle-income dollar? Should the retailer redouble its efforts to out-Target Target, or would it be better off going back to basics?
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Posted by Media Team on Friday, April 20 | 14 comments | Permalink
Wal-Mart Tries to go Green
Wal-Mart pushes suppliers to ‘go green’ [MSNBC]
For Wal-Mart, there is a clear financial benefit to having suppliers reduce packaging or make more concentrated products — it translates into lower shipping costs and less waste, which reduces expenses. Wal-Mart says its goal is to reduce packaging by 5 percent by 2013, over 2006 levels.
Not long ago, Wal-Mart Stores Inc. announced plans to start judging its vast chain of suppliers not just on conventional criteria such as price, but also on a new standard — the environmental sustainability of its packaging.
Wal-Mart said the new scorecard wouldn’t be used to influence the massive retailers’ purchasing decisions until 2008. Still, the companies that fill the shelves in Wal-Mart’s stores — and in some cases depend on that business — knew better than to sit on their hands.
The result? Wal-Mart has seen more innovation in packaging in the past six months than it had seen in the previous five years, said Andy Ruben, Wal-Mart’s vice president for corporate strategy and sustainability
How did the retailing giant garner so much change so fast? Call it business as usual.
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Posted by Alex Goldschmidt on Thursday, April 19 | 0 comments | Permalink
Where Wal-Mart Goes, Others Will Follow
USA Today reports that Home Depot is increasing the number and range of environmentally-friendly products sold in its stores. The article cites Wal-Mart’s recent environemental initiatives for Home Depot’s changes, implying that where Wal-Mart goes, others will follow. Imagine the environmental impact, then, if Wal-Mart were to truly transform not only its product offerings but also its stores, transportation methods, production processes AND took other big box stores with it.
More retailers go for green — the eco kind [USA Today]
Home Depot announced plans Tuesday to offer more environmentally friendly products and make it easier for consumers to find them.
Included are more than 2,500 items ranging from all-natural insect repellents to front-load washing machines. Products that meet the criteria will be tagged Eco Options to make them easier to find.
“We don’t have people banging on our doors, saying, ‘Give us your green products,’ “ says Ron Jarvis, Home Depot (HD) vice president of environmental innovation. “But it’s the right time to educate consumers that their shopping habits can have an impact and that they can make a difference without going out of their way.”
The move by the country’s second-largest retailer comes after the largest, Wal-Mart, kicked off an environmental initiative last fall that favors suppliers who restrict carbon emissions and embrace sustainability.
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Posted by Alex Goldschmidt on Wednesday, April 18 | 1 comments | Permalink
Action Alert: Ask Wal-Mart to Adopt Humane Policies
The American Protection Institute has issued an action alert, urging consumers to ask Wal-Mart to treat livestock-for-slaughter humanely.
Ask Wal-Mart to Adopt Humane Policies
Recently the Animal Protection Institute contacted Wal-Mart asking it to take a stand against the long distance transport of farmed animals destined for slaughter.
Specifically, API asked the retail giant to incorporate animal transport limits into its stores’ meat purchasing polices by not carrying any meat from animals transported more than 8 hours. At the very least, we asked that it use in-store signage to distinguish which meat products did not require the long distance transport of farmed animals.
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Posted by Alex Goldschmidt on Thursday, April 05 | 6 comments | Permalink
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