The Lies Wal-Mart Tells: Wal-Mart’s Sourcing Practices
Wal-Mart spends millions of dollars each year on public relations hoping to counteract the negative impact the company’s business practices have on its reputation. In the process, Wal-Mart’s representatives misrepresent the company, even lying to protect its fragile reputation. This is the second post in a series examining some of the most common lies the company tells - and truth behind the spin.
Lie #2: Wal-Mart Does Not Source from Sweatshops
“When we buy merchandise, we realize that our orders touch factory workers and their communities around the world. As we reflect on the impact of our sourcing, we recognize that success goes beyond financial results alone.” [“Letter from Lee Scott,” Wal-Mart’s 2006 Ethical Sourcing Report]
The Truth:
Wal-Mart’s supplier factories continue to use sweatshop labor. In December 2007, two nongovernmental organizations documented what they said were abuse and labor violations at 15 factories that produce or supply goods for Wal-Mart. Labor rights groups say some Chinese companies routinely shortchange their employees on wages, withhold health benefits and expose their workers to dangerous machinery and harmful chemicals. [New York Times, 1/5/08]
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Posted by Media Team on Thursday, May 15 | 9 comments | Permalink
Bharti Retail Works to Consolidate Stores in North India
Bharti Retail aims to consolidate presence in northern India [Economic Times]
Bharti Retail, a recent entrant in the organised retail market, on Tuesday said before launching pan-India operations, it will focus on Punjab and then move on to consolidate its position in northern India.
“Our focus right now is Punjab and we will first consolidate our presence in North India,” Bharti Retail President and CEO Vinod Sawhney told reporters on the sidelines of a CII organised retail conference.
The company has recently announced the launched of its first three food and grocery stores under the brand name ‘Easy Days’ in Ludhiana, Punjab.
Easy Day is a neighbourhood format store, which has been launched first. The company also plans to have bigger formats like compact medium and hypermarkets.
Asked when the other formats were expected to be rolled out, Sawhney said, the company was at present learning from the experiences of the new stores and was thus concentrating on smaller formats.
Easy Day stores offer a wide range of products ranging from items for daily usage such as personal care products to groceries such as processed foods, staples, bakery, dairy products, meat and poultry.
Sawhney said the company would also focus on private labels at the stores. “As somebody who is entering the retail market we will be looking at private labels also,” he said.
The company, which has a JV with Wal-Mart for cash-and- carry operations and a franchisee agreement for front-end retail, aims to spend USD 2.5 billion by 2015 for opening multiple format stores.
The company is expected to open its first cash-and-carry stores by the end of 2008.
Posted by Vasudha Desikan on Thursday, May 15 | 0 comments | Permalink
Wal-Mart and the Chinese Earthquake: Cheap Help for A Cheap-Labor Country
This article was originally published on Dirt Diggers Digest.
Wal-Mart Stores has put out a press release patting itself on the back for promising the equivalent of about $430,000 for disaster relief and reconstruction for the area of China hit by a massive earthquake this week. The gesture was laudable but the amount was less than impressive.
After all, the giant retailer would be nowhere today without the countless Chinese workers who toil in sweatshops so that American consumers can be offered the cheap goods that are at the core of the company’s business model. Last year those largely Chinese-made goods brought Wal-Mart profits of $12.7 billion, or about $1.4 million every hour of every day. The $430,000 contribution thus represents less than 20 minutes of profit.
Wal-Mart also profits from Chinese consumers. The company operates more than 200 stores in China (through joint ventures and minority-owned subsidiaries), several of which have been shut down because of the tremblor. Wal-Mart was so eager to operate stores in China that it agreed to let its employees there be represented by unions (though of the government-dominated variety).
Wal-Mart has a history of using relatively inexpensive amounts of disaster relief to boost its reputation. After Hurricane Katrina hit the U.S. Gulf Coast in 2005, Wal-Mart maneuvered to get maximum exposure for its prompt delivery of relief supplies. A fairly routine operation for a company possessing the most advanced logistics infrastructure was seen as nearly miraculous, given the ineptitude of federal and state public officials.
The company made an initial faux pas (quickly reversed) in announcing that employees at its stores shut down by the storm would be paid for only three days. It also started out offering a measly $2 million in relief but soon overcame its parsimonious instincts and upped the figure by $15 million, thereby winning wide praise. The wave of favorable coverage went on for several months, thanks at least in part to the efforts of its army of p.r. operatives from Edelman and a conservative blogger who was paid to tout Wal-Mart’s hurricane work in the blogosphere.
Wal-Mart may have to part with more than $430,000 to get a similar public relations bonanza from China’s suffering.
Posted by Philip Mattera on Thursday, May 15 | 1 comments | Permalink
Wal-Mart’s 2008 Shareholder Resolutions: Human Rights Committee
This is the third 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 #7 on this year’s proxy proposes the establishment of a human rights committee at Wal-Mart. Below, the details of the proposition, why Wal-Mart’s shareholders would benefit and how the company has reacted to the proposal.
Wal-Mart’s Public Image Problem
Reports of human rights violations have dogged Wal-Mart for years - particularly in the company’s supplier factories, most of which are overseas. These violations have thoroughly damaged Wal-Mart’s reputation, with everyone from U.S Senators to Wal-Mart employees to factory workers themselves speaking out about the inhumane conditions in Wal-Mart’s supplier factories. Bama Athreya, director of the International Labor Rights Forum, testified before Congress on the issue of toy safety, explaining that “Wal-Mart bears a lion share of responsibility for pushing the toy industry to a place where worker health and safety are basically nonexistent.”
Wal-Mart also holds the ignominious title of being the only company investigated by Human Rights Watch for its domestic labor practices. The group’s 2007 report labeled Wal-Mart’s union-busting policies a violation of basic human rights, saying:
It pursues its anti-union agenda relentlessly, often from the day a new worker is hired, devoting considerable time and resources at all levels of the company to the anti-union drumbeat.
The constant stream of allegations have damaged Wal-Mart’s reputation and in turn, its profits. In 2007, a Bank of America analyst’ report found that Wal-Mart’s profits had suffered as a result of organized labor’s opposition to the company and its unethical labor practices. The report noted that the union’s campaign “has cost WMT [Wal-Mart] real estate sites in key locations, adversely impacted comp store sales to some degree, and has distracted m management from focusing on its retail strategy. Additionally, Lee Scott now spends a large amount of time improving WMT’s image domestically and abroad, and WMT has been forced to focus advertising dollars on defending their brand.”
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Posted by Research Team on Tuesday, May 13 | 3 comments | Permalink
Wal-Mart Continues to Focus on Expansion Abroad
In this article from the Arkansas Democrat-Gazette, author Steve Painter makes the important correlation between Wal-Mart’s increasing international expansion and the company’s difficulty expanding in the U.S. Just last week the company lost a 2-year-long site fight on the south side of Chicago, a crucial city in the company’s urban expansion plans. Wal-Mart has met opposition to its international plans as well, including protests in India which have stymied the company’s plans there. Were all international markets aware of Wal-Mart’s business practices, we’re pretty sure the company’s expansion efforts abroad wouldn’t be going so well.
Foreign markets fertile for Wal-Mart [Arkansas Democrat-Gazette]
In Brazil, Wal-Mart Stores Inc. is counting on its small format Todo Dia neighborhood grocery stores to drive sales among low-income customers.
In Canada, Wal-Mart continues to add supercenters to its traditional base of discount stores, gaining market share.
In India, Wal-Mart partner Bharti Enterprises recently opened the first of its new Easy Day stores in a nation teeming with potential customers.
Deploying formats ranging from convenience store-sized markets to U.S.-sized supercenters, the world’s largest retailer is expanding its international operations at several times the rate of its stores in the United States, where it scaled back growth last year.
As Wal-Mart increasingly encounters opposition to its stores in U.S. cities it has yet to penetrate, it has mostly found open doors overseas, especially in developing economies where incomes are rising. In the past year, Wal-Mart’s international selling space grew 18 percent while U.S. space was up 4.6 percent.
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Posted by Alex Goldschmidt on Monday, May 12 | 40 comments | Permalink
Canada Site Fight: Municipal Board Hearings in Bobcaygeon
Wal-Mart OMB hearing underway [My Kawartha (Ont.)]
The future of the proposed Wal-Mart commercial development currently sits in the hands of the Ontario Municipal Board as proceedings began yesterday in Bobcaygeon.
A meeting room at the Bobcaygeon Service Centre has been tentatively booked for six weeks as those involved in the project’s progress deliberate.
However, a number of issues regarding the development have already been resolved, which could see the matter dealt with in a shorter time period.
Although the meetings are open to the public, comments and input will not be received.
Mason Homes is proposing to develop more than 13 hectares of land at the corner of Colborne Street and Highway 35 N. The developer hoped to construct a 28,300-square-metre retail centre at the site, anchored by a Home Depot and Wal-Mart and a number of specialty stores.
Plans for the project were filed in early 2005 and several studies have already been completed including market, traffic and urban design. The City received planning documents in 2006 and made amendments to the Official Plan.
Last spring, changes were made to the site plan in response to requests made by the Ministry of Transportation and further plan amendments were initiated by the City in August 2007.
Posted by Alex Goldschmidt on Tuesday, May 06 | 0 comments | Permalink
Tillsonburg, Ontario. Former Mayor Says Wal-Mart Supercenter Will Create Ghost Center
Tillsonburg, Ontario, serves as a regional retail center. It has a population of only 15,000 people, but says there are 100,000 people within a 30 minute drive. The town’s motto is: “A Place to Build Your Future.” “We are a dynamic, prosperous and caring community,” say town officials.
The town views itself as a “fast growing town” in southwestern Ontario’s industrial corridor, and promotes its quality of life. “Experience Tillsonburg,” says Mayor Stephen Molnar, “you will not be disappointed.”
But many residents in Tillsonburg are disappointed that the Mayor has not taken a more aggressive stand against a proposed Wal-Mart supercenter submitted by one of the major developers of such projects in Canada, the inappropriately named “SmartCentres.” Three ex-Mayors have testified against the plan for a 175,000 s.f. superstore, slated for the town’s north end. Several economic impact studies for the town have warned of significant and adverse impacts of this project on existing businesses.
Oxford County planners have asked for more data on traffic from the Ministry of Transportation, and are concerned about the availability of water and wastewater services at the site, according to the Tillsonburg News. Two town councilors have had to recuse themselves because of a financial conflicts of interest. In March, 2008, former Mayor Cam McKnight said the key issues were developer credibility, municipal integrity, the impact on the downtown, and long-term planning and local quality of life.
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Posted by Al Norman on Tuesday, April 22 | 0 comments | Permalink
Asda Drops Spokeswoman in Attempt to go ‘Upscale’
Wal-Mart’s UK arm Asda has decided to part ways with long-time spokeswoman Coleen McLoughlin. The reason? Asda’s decided to go ‘upmarket.’ Like its U.S. counterpart, it seems Asda has its sites set on wealthier customers. Will the U.K. retailer’s plan similarly backfire?
Coleen McLoughlin dumped as face of Asda as retail giant bids to go upmarket [Daily Mail (U.K.)]
Asda has dumped Coleen McLoughlin as the face and shape of its women’s clothing range as it seeks to move upmarket.
Wayne Rooney’s 22-year-old fiancee was told her services were no longer required when her £3million, two-year contract came to an end last month.
The supermarket giant is setting its sights high in the quest for a replacement with targets such as Joanna Lumley, Helen Mirren, Sienna Miller and, according to one source yesterday, French president’s wife Carla Bruni.
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Posted by Alex Goldschmidt on Tuesday, April 22 | 0 comments | Permalink
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