What Wal-Mart Can Learn from Costco
Wal-Mart defenders are quick to justify the company’s low wages and poor health care plan as necessary for keeping prices low. This piece from author Liza Featherstone argues otherwise. Featherstone examines the differences between Sam’s Club and Costco, two stores with similar business models but divergent views on employee treatment.
Costco’s comparatively higher wages, better health care plan and unionized workforce prove that employee happiness and high profits can co-exist, despite Wal-Mart’s seeming insistence to the contrary. And while Wal-Mart’s profit margins are twice as high, Costco’s revenue per employee is five times that of its Arkansas-based competitor. So while Wal-Mart may insist on low pay and poor benefits, its forward-thinking competitors might just prove this business model is behind the times.
Wage Against the Machine [Slate]
Nearly everyone who’s looked at Wal-Mart’s practices as an employer—its union busting, sex discrimination, low wages, and minimal benefits—has concluded that it’s America’s retail bad guy. By contrast, many who’ve examined the practices of Wal-Mart’s competitor Costco—including New York Times labor reporter Steven Greenhouse in his recent book The Big Squeeze: Tough Times for the American Worker—conclude that it’s the good guy. Costco CEO and founder Jim Sinegal repeatedly insists to Greenhouse that treating employees well is “good business.”
That makes a pleasing sound bite, and assume for a moment that Sinegal’s assertion is true. Why, then, wouldn’t Wal-Mart do everything it could to make itself more like Costco? Now assume that Sinegal’s assertion is false. Why, then, does Costco treat employees better if that’s against the company’s financial interests?
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Posted by Alex Goldschmidt on Friday, June 27 | 29 comments | Permalink
Wal-Mart’s ‘Reform’: Progress or PR?
The debate continues over whether Wal-Mart’s efforts to shape up are actually genuine, or merely the result of a well-crafted PR campaign. I think it’s fair to say: both. Perhaps the biggest problem this debate reveals is Wal-Mart’s lack of transparency. Despite the retailer’s dominant presence in communities across the country, no one really knows how it runs its business. What we do know, however, is that Wal-Mart will do anything to fight the negative publicity it’s received in recent years. As Wal-Mart Watch’s executive director David Nassar says in the article, “Wal-Mart heard the criticism and is trying to do something to address it. All the changes it’s made so far have passed costs onto someone else, whether it’s a health care plan that’s increasing costs for workers or environmental initiatives that pass costs on to suppliers.”
Creating a Better Rep: Wal-Mart Undergoes An Image Turnaround [Women’s Wear Daily]
Talk about a turnaround.
Wal-Mart not too long ago was making headlines almost weekly as critics lambasted the retailer for its pay practices, pollution and rapaciousness. Now it’s being held up as one of the retail world’s better corporate citizens. Along the way, Wal-Mart Stores Inc. executives — famously insular and focused principally on what founder Sam Walton would have done — have become more outspoken, open to outsiders’ views and adaptable.
Thanks to a multimillion-dollar public relations and marketing campaign, aggressive environmental initiatives and price rollbacks billed as the retailer’s very own “economic stimulus package,” the company is out to recast itself as a champion of the environment and a benevolent big business.
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Posted by Alex Goldschmidt on Tuesday, June 17 | 10 comments | Permalink
Friday Blog Roundup: Shareholders Edition
SHAREHOLDERS MEETING: MORE SHOW, LESS SUBSTANCE
Carrie Underwood and Keith Urban are going to be performing in Bentonville next week! And some band we’ve never heard of called Lifehouse (and Taylor Swift)! WE’RE SO EXCITED ABOUT THE ENTERTAINMENT WE CAN’T EVEN REMEMBER WHY THE MEETING IS HAPPENING IN THE FIRST PLACE oh wait, yes we do.
Wal-Mart to Shareholders: Just Say No [The Iconoclasts]
Lay up groceries and rent some DVDs before the Wal-Mart shareholders descend on Fayetteville and occupy the city next week. The big annual meeting is scheduled for June 6 at the University of Arkansas, the corporate giant’s wholly-owned subsidiary. They are coming to be entertained and to vote against any shareholder proposals to reform policy or hold management responsible for their actions.
Wal-Mart’s habit of entertaining visitors rather than conducting actual business has everyone raising eyebrows:
Wal-Mart’s green efforts becoming a smokescreen? [BloggingStocks]
Next week’s annual shareholder’s meeting in Fayetteville should once again be more spectacle that business.Last year, Wal-Mart Stores, Inc. (NYSE: WMT) seemed to spend more money lining up speakers, having pieces of its global operations dance with flags and having a pep rally rather that digging into issues.This year, expect the same—as the retailer has already opposed all the shareholder proposals anyway, so it should be a nice, big party full of entertainment. Nothing else.
Wal-Mart’s emphasis on entertainment have activists decrying the retailer’s lack of commitment to the social issues on this year’s proxy. Pam’s House Blend states,
Call me less than flabbergasted, but Wal-Mart is opposed to a shareholder proposition to add gender identity and expression to their non-discrimination policy...this is the second major corporation we’ve tracked at Pam’s House Blend that has used their DiversityInc rating (Wal-Mart was no. 41 of top 50 company’s for diversity in 2007; Verizon was no 1 on the same list for 2008) as to why the corporation doesn’t feel a need to specifically add gender identity and expression language into their non-discrimination policies.
After the jump, Menu Foods settles with pet owners over melamine-tainted food, Wal-Mart’s environmental policy, classified ads and look out! There’s scorpions in the watermelons!
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Posted by Alex Goldschmidt on Friday, May 30 | 1 comments | Permalink
No Way To Treat a Friend: Wal-Mart’s Shabby Earthquake Aid to China
Wal-Mart has been quick to take credit for its donation to earthquake victims in China, but those affected by the disaster aren’t buying the company’s spiel.
Wal-Mart has donated a little over $430,000 to victims of the earthquake, less than 1/30th what it donated to victims of Hurricane Katrina in 2005. Like this current disaster, Wal-Mart initially donated a far smaller sum to Katrina victims, but ultimately realized the PR benefit would make a larger donation worthwhile. If Wal-Mart wants a similar PR boon for its actions in China, it’s going to need to pony up a lot more dough.
Dirt Diggers Digest explains that Wal-Mart owes China big time. Wal-Mart’s $12 billion+ profits are largely made possible by cheap Chinese labor - the company sources the majority of its products from Chinese manufacturers, which are notorious for low wages and long hours. Wal-Mart also has a large retail presence in China and is rapidly expanding in the country. Considering that China is Wal-Mart’s largest supplier AND one of its largest markets, it’s in the company’s best interest to help the victims there as much as possible.
Donations Pour In, but Resentment Arises [Wall Street Journal]
The Sichuan earthquake has unleashed a flood of donations. Within China, it has also led to scorn heaped on successful people and big companies—including foreign brands such as McDonald’s Corp. and Wal-Mart Stores Inc.—whose perceived generosity somehow undershot expectations.
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Posted by Alex Goldschmidt on Friday, May 23 | 37 comments | Permalink
What Would Jesus Buy?
On their trip across America, Reverend Billy and the Church of Stop Shopping stop at the Wal-Mart home office, hoping to exorcise the retailer’s headquarters of its consumerist demons. It’s only one stop on the group’s trip, which includes shopping malls decked out for Christmas and Main Street USA in Disney World.
“What Would Jesus Buy,” the documentary film following Reverend Billy on his crusade against consumerism, premiered in 2007. Newsweek reviewed the film, saying “The new film is Reverend Billy’s tour de farce—a ferociously satirical and cynical take on consumer culture, pegged to America’s most sacred spending season.” “What Would Jesus Buy?” comes out on DVD next week. Order a copy now and use the code “WALWATCH” to get five dollars off the retail price.
The irony of buying a DVD about anti-consumerism has not escaped us, but Reverend Billy’s message is worth spreading. Share this DVD with friends or organize a screening. The movie’s website has material for home screenings, including posters and resource guides. Repent now before the Shopocalypse is upon us!
Posted by Media Team on Thursday, May 22 | 1 comments | Permalink
Wal-Mart’s 2008 Shareholder Resolutions: Equal Opportunity Employment Policy
This is the fourth in a series of posts on Wal-Mart’s 2008 shareholder resolutions. The full list of resolutions - and Wal-Mart’s statements regarding them - can be found in the company’s 2008 proxy here (PDF).
Resolution #4 on this year’s proxy proposes amending Wal-Mart’s equal opportunity employment (EOE) policy to include protection for gender-identity-based discrimination. While the company’s policy currently protects individuals from discrimination based on sexual orientation, transgendered employees have no such protection.
The resolution is sponsored by the Unitarian Universalist Association of Congregations (UUA), a faith-based community of over 1,000 congregations. In light of inconsistent state and local gender-identity-based discrimination laws, this resolution would create a consistent standard of protection for Wal-Mart employees across the country.
Gender-Identity Rights as Human Rights
Over the years, EOE policies have expanded to protect groups based on religion, race, gender and sexual orientation. Now human rights groups are advocating for gender-identity-based protection to be included in corporate policy and federal law. If Wal-Mart were to adopt this proposal, it wouldn’t be alone - thirty percent of Fortune 500 companies already protect individuals based on gender identity.
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Posted by Research Team on Wednesday, May 21 | 45 comments | Permalink
Wal-Mart Charges More for Groceries in Low-Income Neighborhoods
Wal-Mart claims to save people money. That would appear to be a lie. This arresting article from the Denver Post asserts that Wal-Mart charges more for groceries in low-income neighborhoods than in affluent neighborhoods. Despite the company’s claim as a resource for the working class, Wal-Mart’s pricing strategies appears to be anything but. If this article’s assertions are true, Wal-Mart’s pricing strategies are dishonest and shameful.
Much of this undoubtedly has to do with competition. Once Wal-Mart has driven out local competitors (and left a local economy depressed), the company is free to charge more for its products without fear of being undersold. This cycle of poverty and lack of access to resources is what makes Wal-Mart such an insidious neighbor. Working class communities should read this as a cautionary tale when considering a Wal-Mart, and be wary of the company’s promises of low prices.
Price disparity in groceries [Denver Post]
It’s not cheap being poor.
Few places reflect that reality more than the aisles of a grocery store, where prices seemingly increase daily as the economy teeters toward recession.
“It’s not very easy to make do right now,” said Kathryn White, a 58-year-old disabled nurse who relies on a small food-stamp stipend to offset high grocery costs.
“I just can’t look to buy something that costs $2,” she said. “I have my limits.”
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Posted by Research Team on Monday, April 07 | 1 comments | Permalink
Wal-Mart Revises Charitable Donations for Optimal P.R. Impact
Wal-Mart’s charitable donations are a cheap way to get some positive publicity for a company that’s increasingly viewed as damaging to communities and local economies. It’s true that many boy scout troops and community centers have benefited from Wal-Mart’s charitable donations over the years. But the economic damage of Wal-Mart’s business practices far outweighs any check the company will ever write. Perhaps Wal-Mart is now facing a reputation crisis: the company announced today that it will be making fewer, but larger donations at the state level in hopes of attracting more publicity.
Bentonville : Wal-Mart revising donations [Arkansas Democrat Gazette]
Wal-Mart Stores Inc. is refocusing its charity to give it more punch.
America’s No. 1 corporate donor, Wal-Mart traditionally hands out thousands of small checks to Scout troops, food pantries and other local causes in Wal-Mart towns from coast to coast.
While store managers will still sprinkle those $ 500 checks around their communities, the Wal-Mart Foundation in Bentonville is now steering some dollars to state-level funding pools set up to make larger donations.
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Posted by Alex Goldschmidt on Wednesday, March 19 | 9 comments | Permalink
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