New Report Calls Wal-Mart Environmental Initiatives “Smoke and Mirrors”
A new report jointing published by 23 organizations across the country calls on Wal-Mart to reframe its sustainability efforts so that workers, the environment and communities are all respected. The report examines several specific areas where Wal-Mart falls short of its claim of environmental-friendliness. Areas of focus include Wal-Mart’s organics, seafood, wood sourcing, product packaging, dangerous toys, contributions to global warming, energy use, and waste quantities. The report goes on to incorporate workers’ rights and community impact analyses, retaining a wholistic view of Wal-Mart’s business model overall. From the introduction:
Nearly two years ago, Wal-Mart CEO H. Lee Scott announced a bold initiative to turn the world’s largest company green. A long-anticipated fi rst progress report on these sustainability goals is expected to be released soon. In advance of the company’s report, 23 environmental, farm, labor, and other civil society groups have offered their own critiques of Wal-Mart’s approach to
sustainability.Some of these critiques focus on specific Wal-Mart commitments and offer recommendations for change. Others argue that even if Wal-Mart achieved all of its stated goals, the company’s
business model makes it inherently unsustainable. All of them remind us of what’s at stake by demonstrating Wal-Mart’s huge and often devastating impacts on real people and places in the
United States and around the world.
Click here to download the full report from the Big Box Collaborative.
Posted by Alex Goldschmidt on Thursday, September 06 | 2 comments | Permalink
Yet More Toys from China Recalled
Mattell has announced yet another recall of toys made in China. This time, the recall affects Mattel’s flagship brand, Barbie. For those who wonder how Wal-Mart fits in to Mattel’s latest toy recall, this quote from a Financial Times story yesterday points out the key:
“Wal-Mart and these other buyers keep pushing for better terms, regardless of the conditions we face,” adds the owner of a textiles plant in the Shanghai area, wishing not to be identified. “Everyone is facing higher costs, but they can get away with it because the orders are so large and because there are so many companies competing for the same business.”
Mattel Issues Third Recall of China-Made Toys [Forbes]
As if Big Bird, Elmo, and cartoon friends hadn’t proved hazardous enough, parents around the globe now need to watch out for Barbie-branded miniature dogs and cats, tables and chairs from a Barbie kitchen play set, GeoTrax’s rail and road system, and the Big Big World 6-in-1 Bongo Band, as Mattel on Tuesday recalled 848,000 Chinese-made toys that contain excessive amounts of lead paint.
The voluntary recall announced late Tuesday night covers 11 types of toys globally, including 675,000 units of accessories--pet figurines and furniture play sets--sold under the Barbie brand and 98,900 units of Fisher-Price toys because of impermissible levels of lead. More than 60% of them were sold in the United States. The recall results from Mattel’s ongoing investigation of its toys manufactured by vendors in China.
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Posted by Alex Goldschmidt on Wednesday, September 05 | 6 comments | Permalink
Wal-Mart’s Green (P.R.) Machine
Today’s Wall Street Journal examines big businesses trying to go green and features Wal-Mart prominently:
Even companies with longstanding energy-saving programs are redoubling their efforts in light of rising fuel costs and greater pressure from the public to address global warming. Wal-Mart Stores Inc.—which by some measures is the world’s second-largest energy purchaser after the U.S. government—has undertaken a multiyear campaign to retrofit older stores with new lighting and air-conditioning systems. Company officials boast that many of these energy projects pay for themselves within two years.
The article discusses several of Wal-Mart’s environmental initiatives, but seems to miss the fact that most of these initiatives have yet to be implemented (the two “green” stores that Wal-Mart always trots out in articles like this represent a whopping .02% of the company’s total stores worldwide.) It’s great to change lightbulbs, but Wal-Mart still uses far more energy than it saves. In fact, any environmental advances the company makes will be offset by new store construction. From “Is Wal-Mart Really a ‘Green’ Company?”:
Wal-Mart’s new stores will use more energy that its energy-saving measures will save. Wal-Mart hopes to cut 2.5 million metric tons of CO2 emissions by 2013, by making its existing stores 20 percent more efficient. New stores built in 2007 alone, however, will consume enough electricity to add approximately one million metric tons of CO2 to the atmosphere. At that rate, (adding one million metric tons of CO2 per year because of new stores), by 2013 Wal-Mart will be offsetting its cut of 2.5 million metric tons of CO2 by adding 28 million metric tons of new emissions within the same time period. [Stacey Mitchell. “Keep your eyes on the size: The impossibility of a green Wal-Mart.” http://www.grist.org, March 28, 2007.]
This in addition to the company’s numerous EPA violations, its pesky habit of leaving abandoned buildings behind when it expands, its stores’ huge physical footprint (which greatly contributes to water pollution and wildlife habitat destruction), the millions of miles customers drive to get to and from these stores and the energy required to get merchandise shipped from overseas and placed on your neighborhood Wal-Mart’s shelf. The company still has far to go before it can claim its place in the environmental playbook.
From “Business Goes on an Energy Diet”:
Retailing
A key decision for any company that wants to reduce energy costs is where to entrust accountability and authority. Wal-Mart, like other big retailers, has centralized that power at its corporate headquarters.For instance, when homeowners want to turn up the air conditioning, they only have to flick a switch. But when a Wal-Mart manager thinks his store is getting a bit too steamy, he must contact the company’s Bentonville, Ark., headquarters.
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Posted by Alex Goldschmidt on Monday, August 27 | 3 comments | Permalink
Lessons Learned from Henry Ford
Barbara Ehrenreich’s discussion of the Wal-Mart economy in today’s issue of The Nation reiterates the concept that Wal-Mart’s business model is inherently unsustainable. After reporting poor Q2 sales last week, Wal-Mart CEO Lee Scott pointed to the fact that the company’s customers are poor (as Ehrenreich explains) as a reason why the company is struggling. However Wal-Mart itself is contributing to nation-wide poverty by outsourcing jobs, lowering the median wage and, as this article discusses, contirbuting to the vicious cycle of borrowing and spending that keeps people in poverty.
The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system...[I]n a diabolically clever move, the poor--a category which now roughly coincides with the working class--stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that “it’s no secret that many customers are running out of money at the end of the month.”
I wish I could report that the current attack on capitalism represents a deliberate strategy on the part of the poor, that there have been secret meetings in break rooms and parking lots around the country, where cell leaders issued instructions like, “You, Vinny--don’t make any mortgage payment this month. And Caroline, forget that back-to-school shopping, OK?” But all the evidence suggests that the current crisis is something the high-rollers brought down on themselves.
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Posted by Alex Goldschmidt on Tuesday, August 21 | 20 comments | Permalink
The Neutrality of this Article is Disputed
Earlier this week, an ingenious young computer programmer named Virgil Griffith released a clever new tool for tracking edits to Wikipedia. The concept of WikiScanner is simple: Wikipedia keeps a detailed log of every single change made to it, and users can see what any page looked like at any time in the past. WikiScanner allows users to search for a company (and its corresponding IP addresses) and then shows what changes to the site those IP addresses have made. The London Times and Wired Magazine disucss the program at greater length.
It seems that some employees at Wal-Mart have been altering the site to the company’s advantage, at times deleting facts and replacing them with delicately-phrased reconstructions of half-truths. Wikipedia is not always the most reliable source of information, granted, but the company’s actions point to a larger desire to obscure the truth behind its business practices. Click on the images below to view the changes the company has made to the site.
Changes made: A new paragraph claims that a new store adds an average of 50 retail jobs in a community. What it doesn’t say is that the presence of a Wal-Mart also lowers the average wage in the area AND puts local retailers out of business, thus eradicating the gains of any jobs it might have added. [Source: “Wal-Mart and County Wide Poverty,” University of Pennsylvania, 2004]
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Posted by Media Team on Thursday, August 16 | 39 comments | Permalink
What’s Wrong With Wal-Mart
BNet’s analysis of Wal-Mart’s current challenges, how the company fell from grace, and what its doing to stem its losses. If you’d like to read (cough) nearly all (cough) of what’s in this article, please consult the growth report we released in June (PDF). For further discussion of Wal-Mart’s extensive problems, visit BNet’s feature.
Why Wal-Mart Needs Help [BNet]
The world’s most successful retailer needs help. Although Wal-Mart generated gross profits of $84 billion on $349 billion in revenue in 2006, its share price has stayed virtually flat since 2000. Domestic same-store sales crept up by just 1.9 percentage points in 2006 — the worst showing in Wal-Mart’s history. International growth has been beset by humiliating failures. Public relations gaffes continue to dog the company, and there are few inefficiencies left to squeeze from Wal-Mart’s hyper-efficient distribution system. The worst part is, all of these problems are interrelated, and they’re coming to a head just as competition from rivals like Target and Costco is heating up. Let’s take a closer look at the issues that are dragging Wal-Mart down.
1. Domestic Saturation
The Summary: After years of U.S. expansion, Wal-Mart is running out of real estate.
The Challenge: Opening new markets by overcoming opposition in U.S. urban centers.
The Key Fact: Half of all Americans already live within a 10-minute drive of a Wal-Mart store.Most retailers will tell you, “If you have the opportunity to grow, you take it.” That’s just what Wal-Mart did, opening 2,200 Supercenters — its largest and most profitable store format — since 1988. Now, however, the company is confronting the realities of domestic saturation as it becomes harder and harder to find spots to erect new stores. “It’s a huge issue for them,” says Philip C. Bonanno, a management consultant with Management Ventures Inc.
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Posted by Alex Goldschmidt on Thursday, August 16 | 0 comments | Permalink
MarketWatch on Wal-Mart’s Quarterly Earnings
Retail consultant Burt Flickinger III weighs in on Wal-Mart’s financial problems. He calls the retailer’s quarterly earnings a “train wreck,” and explains that the stopgap measures Wal-Mart has been employing - cutting staff and raising prices - are no longer going to work. He calls for new leadership for the company, citing poor labor relations as one of the reasons why the retailer is struggling with its bottom line, and insists that financial problems will dog Wal-Mart until the deeper, underlying issues are resolved. From MarketWatch:
Transcript:
John Wordock: Two major retailers are reporting news. Wal-Mart says that it is cutting its estimate for the fiscal year, despite a nice 49% rise in net income, and Home Depot is also signaling some trouble: it is saying that the housing slump is taking a toll on its business. Joining us to talk about the impact that the slowing economy or the housing recession (as some are calling it) is having on these two major retailers is Burt Flickinger III, he the managing director at Strategic Resources. He’s a retail consultant. Burt, let’s tackle Wal-Mart first. What do you make of this news coming out of Wal-Mart?
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Posted by Alex Goldschmidt on Tuesday, August 14 | 16 comments | Permalink
Full Shelves, Empty Aisles
Woes mount for Wal-Mart [Toronto Star]
It was business as usual for Wal-Mart last Tuesday for a superstore opening in Peru, Ill., which is to say the mood was of righteous self-assuredness. A marching band played “The Star-Spangled Banner,” store manager Mitch Lippert whipped up his troops ("Who’s fired up!"), and Rev. Oscar Shepherd of Christ Family Foursquare Church sought the Almighty’s blessing “as we interact with each other in the marketplace.”
You’d never know Wal-Mart Stores Inc. was in a heap of trouble.
The company’s growth rate has slowed to a crawl, overtaken by rivals once thought to be no match for the “beast of Bentonville.” Average annual profit growth lags that of Target Corp., Costco Wholesale Corp. and other competitors. Wal-Mart’s repeated efforts to push upscale merchandise have ended in tears. Expansion at home is still thwarted by hundreds of U.S. communities; and several forays abroad are struggling or have been scrapped. The stock price is down 32 per cent since the turn of the century, when CEO Lee Scott took the reins, while the Morgan Stanley retail index has soared 180 per cent.
If Wal-Mart wasn’t 40-per-cent controlled by the heirs of founder Sam Walton, an “activist investor” like Carl Icahn or Kirk Kerkorian would be calling for Scott’s head and the spin-off of Sam’s Club, an also-ran to Costco.
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Posted by Alex Goldschmidt on Monday, August 13 | 21 comments | Permalink
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