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While same-store sales rebounded ever-so-slightly in April, Wal-Mart continues to chug merrily right along, posting a 5% gain. Meg Marco at Consumerist explains it thusly:

A new survey of American consumers shows something very unusual — they’ve lost their interest in shopping. Is this lack of interest driving them to discount stores like Wal-Mart? Seems so...As interest wanes, more and more shoppers are heading to discount stores like Wal-Mart, says CNN.

So there you go. A little happy, uplifting news for your Thursday afternoon. We’ve lost our will to shop so much so, that we’re willing to go to Wal-Mart just so we can get it over with. So when the economy was going well Wal-Mart’s same store sales were flat, but with the economy in the tank, they’re rolling right along? Yay.

We’ll let Meg have the final word:

Have you “downgraded” to Walmart?

Walmart To Rest Of Planet: “What Recession?” [Consumerist]

A little less gloom at the store [CNN.com]

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A push to get rid of wilted lettuce and rotten tomatoes is paying off for Wal-Mart, despite a grocery business that continues to score low in customer satisfaction. From Bloomberg:

Wal-Mart plans to advertise its produce in coming months to win over more customers after efforts to tidy displays, buy food locally and automate purchasing, executives said in interviews last month at the company’s headquarters in Bentonville, Arkansas. Groceries account for more than 40 percent of sales at Wal-Mart’s U.S. stores and have outpaced the growth of most other products in the past year.

Despite the fact that Wal-Mart has undoubtedly prospered during our country’s economic...ummm...struggles, the perception of the quality being sold there remains low. In fact, on the American Customer Satisfaction Index posted by the University of Michigan, Wal-Mart consistently ranks at the bottom.

Customer ratings on meat and produce have trailed the rest of the store, said Bill Simon, Wal-Mart’s chief operating officer for U.S. stores...In terms of customer satisfaction, Wal-Mart’s grocery business ranked worst in the fourth quarter compared with six major supermarket chains, according to the University of Michigan’s American Customer Satisfaction Index.

What this doesn’t bode well for is Wal-Mart maintaining its market share once the economy turns around. Indeed, Wal-Mart sits at a 68% satisfaction rate, 8 points behind the average supermarket score and over 4 points behind Wal-Mart’s own score from a year ago. If that continues, could an uptick in economic fortunes see shoppers returning to their old grocery shopping habits?

So, are we happy that Wal-Mart is trying to upgrade the quality of its produce? Or perhaps the better question to ask is, should we be concerned about the reasons why Wal-Mart needs to upgrade its produce in the first place? Couldn’t they have tried to avoid sub-standard produce right from the beginning? Beverly Crisp, a shopper interviewed by Bloomberg, was surprised on her most recent shopping trip that Wal-Mart’s grocery aisles weren’t “the mess” they had been previously - if that’s the general consensus among shoppers, Wal-Mart is going to need more than just new broccoli to fix its image.

Wal-Mart’s Push for Fresher Broccoli Boosts Revenue [Bloomberg]

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Mike Duke is wasting no time putting his stamp on Wal-Mart.

In a time when workers everywhere are struggling through the recession while Wal-Mart eats market share and makes billions, and pro-Wal-Mart flakkery is printed every day in the media, the company has decided on a prescription: more PR.

The Wall Street Journal is reporting that Wal-Mart apparently no longer thinks Edelman can handle the full load, and is looking to bring on up to five additional public relations firms. The WSJ looked at internal Wal-Mart documents and found that the company feels it needs more spin in order to lock down the gains it has made during the recession.

It’s unclear as of yet how much of slap the move is to Edelman. Perhaps the company truly thinks it needssix PR firms hock its products and defend against bad press. But we do know that we need to be on guard - more than ever - against Wal-Mart spin. 

Wal-Mart Seeks to Hold Gains With Expanded Focus on PR [Wall Street Journal]:

In a sign that Wal-Mart Stores Inc. plans to capitalize on its sales strength in the recession, the retailer is in the process of hiring five public relations firms to better promote its products, according to documents reviewed by The Wall Street Journal.

The Bentonville, Ark.-based retailer plans to put the firms on retainer and then have them bid on individual projects, an effort by the notoriously frugal retailer to contain costs. This strategy is becoming more common in the advertising industry as businesses attempt to rein in marketing budgets amid falling revenues.

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Wal-Mart’s recession power play is no joke. Wal-Mart is one of the only company’s with a strong hand right now, and it clearly plans to play it aggressively.

In a matter of weeks, Wal-Mart has revealed intentions to use the recession to move in to virtually every untapped urban market in the U.S. First it was Chicago, which was shocking enough - given that the company was just handed a major defeat only months earlier. Then it was New York, although that plan still appears to be mostly speculation. Now the Los Angeles Times profiles the very real plan to move a Wal-Mart in to Central L.A., despite the understanding by project proponents that it would put dozens of local retailers out of business.

Unlike other major urban centers, Los Angeles hasn’t entirely resisted Wal-Mart. As you can see from the map above, Wal-Mart has a good number of stores surrounding the city - but hasn’t yet tapped the millions living in Central L.A. Clearly Mike Duke and company, as well as some number of Angelenos - think that the recession is a good time to change that.

We certainly won’t be keeping quiet about Bentonville’s designs on American’s great Wal-Mart-free urban frontiers. And we’re on watch here in D.C. to here any Wal-Mart plans to move into our neck of the woods.

Inviting a Wal-Mart into Florence-Firestone [Los Angeles Times]:

The little tortilleriatortilleria, hidden away in the Florence-Firestone neighborhood near Watts, could be mistaken for a thousand others in the city’s immigrant core. It’s on a mostly residential stretch of Nadeau Street, a few blocks removed from commercial corridors where the buildings that look newer than others nearby are the ones that were rebuilt after the 1992 riots.

Playa Azul is a family business, and pork is the house specialty. The front door is just past a brick wall covered with a large mural in which a cartoon pig looks happy as can be, which is odd because he’s sitting in a tub of cooking oil and will, presumably, be reduced to chicharrones by the end of day.

Inside, Maria Hernandez was in the corner of the muggy kitchen, hand-pressing corn tortillas, one at a time, on an old wooden press brought from Mexico. She has made 300 tortillas a morning this way for 10 years, except on Sundays. Across the room, the market’s owner, Jose Gomez, 58, grimaced and leaned into his long knife while slicing huge pork bellies into fatty strips.

The place was humming, as it has been for half a century. That’s when a man walked in the door with an unlikely plan—so unlikely, in fact, that some around here have equated it to dealing with the devil.

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In this Month’s issue of Mother Jones, Sasha Ambramsky takes a look at the life of a real Wal-Mart worker. Aubretia Edick has worked at Wal-Mart for 8 years, and still makes under the company’s hourly average for New York. She lives on $195 a week, after taxes and deductions.

Former CEO Lee Scott was making more than that every minute.

America on $195 a Week [Mother Jones]:

“I’ll take a sandwich to work and that’s about it,” says Aubretia Edick, who is 58 and works in the pharmacy department of a Wal-Mart in Hudson, New York. “I drink a lot of tea. Once in a blue moon I’ll go into Save-A-Lot and I’ll get some meat. Eggs is kinda like a luxury kind of thing.”

Edick first landed a $6.40-an-hour gig at Wal-Mart back in 2001, and over time her wages inched upward, reaching $10.50 last year. But with inflation factored in, it isn’t that much better than when she first started. To make matters worse, while Edick was technically full time, her manager often slashed her hours due to the slowing economy. In mid-2008, she was grossing roughly $297 a week—$195 after taxes and deductions.

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“We will push ourselves and play offense where appropriate, and we will win in every business that we operate around the world...we’re going to do all the right things to continue our momentum and to widen the gap between the competition and us...”

-Mike Duke

America is struggling through the recession, and Wal-Mart is faring better than most companies - that’s the conventional wisdom.

But not nearly the whole story.

Make no mistake about it: Wal-Mart isn’t surviving the recession, it loves it. While other companies go under, Wal-Mart’s revenue and profit just set all-time records at $400 billion and $13 billion, respectively. Former CEO Lee Scott is riding into the sunset with a $200 million dollar fortune. The Walton Family is, as always, literally rolling in cash—with a net worth of over $100 billion.

And that’s not the half of it. The weak economy is giving Mike Duke and Wal-Mart an opportunity for a enormous growth, and it’s becoming clear that the company is using the smoky cover of recession to run a power play on the world economy that’s unprecedented, even for Wal-Mart.

The main three tenets of its plan are to:

1) Make a power grab at other customers and retailers.

It is common knowledge that Wal-Mart is seeing hundreds of thousands of new U.S. customers who are “trading-down” to shop at Wal-Mart, though they’d prefer not to. It’s yet to be seen whether Wal-Mart will be able to keep them once the tough times end, but company executives have said repeatedly that they plan to.

Circuit City, Mervyns, Linens & Things and untold numbers of independent retailers have all gone under in the last year. Deutsche Bank recently estimated that the retailers who survive the recession will feast on $20 billion in market share left by retailers who don’t survive. Where will the business go? Is there any doubt what company aims to eat the lion’s share of that $20 billion?

2) Expand internationally.

In the past few months, Wal-Mart has opened wholesale stores in India, moved into Chile, opened an office in Russia, and announced it would move into Peru. The company knows its largest growth potential lies abroad, and it reinforced its commitment to international growth by naming former international head Mike Duke to CEO, and naming up-and-coming (and future CEO?) Doug McMillan to take Duke’s old job.

3) Expand domestically into markets that would otherwise reject it.

We’re by no means the first ones suggesting this. While the company has slowed its U.S. growth overall, there’s no doubt that Wal-Mart is licking its chops at the chance to get into communities that have been rejecting it for various reasons for years. 

Only months after being shut out of Chicago after years of resistance, Wal-Mart has somehow worked a deal with local politicians and is eyeing 12 different locations within the city. Wal-Mart is making little secret of its designs on Washington, D.C., and is trying to work its way back into untold numbers of communities under the cover of recession.

In several years, our economy will be getting healthy and sustainable. Hopefully we won’t be looking back in horror at what we let Wal-Mart do in the meantime. 

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Today Wal-Mart announced that it would be laying off 400 more workers as it closes a return center in Macon, Georgia. The following post by Al Norman originally appeared on the Battlemart Blog.

The battleship grey warehouse building in Macon, Georgia has a huge yellow Mr. Smiley face on it, and the words: “Wal-Mart Return Center #9194. Our People Make the Difference.” But the Wal-Mart Return Center in Macon is shutting down, and taking with it about 400 jobs that will not return. The people there didn’t seem to make a difference to Wal-Mart. The Macon plant has operated for 14 years—but will soon be history. Wal-Mart has six return centers in the country. The Macon facility processes products from around the Southeast that may be defective, or recalled, or overstocked.

Some of this merchandise is returned to the supplier, while others are donated to charity. Macon’s loss will be a gain for Spartanburg, South Carolina. According to the Spartanburg Herald-Journal, the new Wal-Mart Return Center is expected to bring up to 500 jobs to Spartanburg County. The new Return Center will be located at North Blackstock Road. A Wal-Mart Return Center is a facility that processes returned items that customers did not want. Workers in Macon apparently only found out about the closing on February 12th. The media reports say the Macon plant will shut down in September. Workers will have nine months to find new jobs. These workers have been let go in the middle of a deepening recession, and they join the 800 Wal-Mart workers who were laid off this week at the retailer’s
headquarters in Bentonville, Arkansas.

“The building there [in Macon] isn’t able to operate at the level of capacity that we need,” a Wal-Mart spokesman explained. He said Wal-Mart returns are just too much for the Macon building, so the company felt its best option was to leave its 400 employees behind, and vacate Bibb County, Georgia. “That, combined with the fact that our lease expires in October… We decided that this is the business decision that makes the most sense.” The Spartanburg return center will not be run by Wal-Mart, but by a contractor. The building in Spartanburg that will house the relocated facility is owned by the Johnson Development Corporation, so its only a matter of time before Wal-Mart dumps the Spartanburg site too, when that lease runs out. The displaced Macon workers will be given a chance to apply for jobs at Wal-Mart of Sam’s Club—but they will have to apply for a job like anyone else. The company has suggested that it might set up a “career fair” for the workers losing their jobs. Wal-Mart said the Macon closure had nothing to do with the state of the economy, and all other options were considered before the decision to close the center was made. It was just a business decision based on a lease.

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Russell Simmons is a hip-hop pioneer. He’s an activist; a philanthropist; a role-model for young, disadvantaged youth.

But is he really launching a new line at Wal-Mart? And now???

Yes, apparently he is. On Feb. 15 Wal-Mart will roll out a new line of men’s clothing designed by Simmons in 350 stores - about 10% of its U.S. outlets - and on its Web site.

[T]he move seems surprising, especially as Wal-Mart flopped famously in its previous efforts to sell more fashionable, pricier clothing… But as Wal-Mart slows its store expansion, it needs to sell higher-profit items to continue generating growth, and apparel is one segment that can still draw new customers.

The clothing items will be priced anywhere from $10-30, not terribly expensive, but some analysts are still questioning the move. From BusinessWeek:

Still, the new line’s timing could not be worse, some analysts say, since Americans have chopped discretionary spending so dramatically.

Wal-Mart to Launch Simmons Clothing Line [BusinessWeek]

As most apparel retailers announce job cuts and store closures because of sluggish sales, it is a precarious time for any of them to launch a new brand. But on Feb. 15 Wal-Mart Stores (WMT) will roll out a new line of men’s clothing designed by hip-hop entrepreneur Russell Simmons in 350 stores, about 10% of its U.S. outlets, and on its Web site. The launch will come less than a week after the world’s largest retailer announced that it will move buyers in the apparel division from its Bentonville (Ark.) headquarters to New York to increase the focus on fashion.

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Wal-Mart; Chicago.

Chicago; Wal-Mart.

Now that you’ve been reintroduced, will you be friends this time?

Time will tell, but opinions on whether the mega-retailer would be good for the Windy City continue to be sharply divided.

From KXMC CBS 13 [North Dakota]:

Because it’d be just awful if the retail giant moved into the city and started providing low-income families with jobs and access to low-priced goods. Big news in bad times: A major retailer wants to bring thousands of jobs to Chicago. But Wal-Mart’s offer is running into the same roadblocks it hit several years ago…

We’ll leave the question of why a North Dakota station is eyeing Chicago alone for now, beyond the fact that they might have Wal-Mart on the brain. Here’s the opposing view courtesy of BloggingStocks:

Whether Chicago and other cities should open their doors to Wal-Mart is a matter that has been debated for literally millions of hours. But it would be a shame to see the city completely abandon whatever principles it claims in order to raise quick cash in a tough economy. But if the city is going to try to make a deal with Wal-Mart, I know an unemployed former governor who is a master negotiator.

The last time Wal-Mart backed down from Chicago, it was because the retailer refused to agree to pay its workers under living wage legislation. This time, the question seems to be - Should Chicago take the quick jobs now, with all the negatives that come with them...or should it hold out for something better? Time will tell…

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Our sources on the ground tell us Wal-Mart called an 8:00 AM meeting and broke the bad news to its home office employees. No statement yet from Wal-Mart, but we’ll keep you updated.

Reports of Layoffs at Wal-Mart and Sam’s Club Home Office [KFSM-TV (Ark)]:

Multiple sources, including current employees, are telling 5NEWS Wal-Mart Stores, Inc. began laying off employees at Wal-Mart and Sam’s Club home offices this morning.

5NEWS spoke with Ed Clifford, president of the Bentonville/Bella Vista Chamber of Commerce. He says he has heard about the layoffs, but cannot confirm any details. Clifford says the affects of any Wal-Mart layoffs will be widespread across Northwest Arkansas, not just Bentonville.

Wal-Mart has not released a statement about the layoffs.

We will pass along more information as it becomes available

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This morning, it was the news that rocked the financial world: Wal-Mart missed its sales estimates and cut profit outlook:

Wal-Mart, the world’s largest retailer, surprised investors who have seen it outperform rivals as the store of choice in a downturn. It said sales at U.S. stores open at least a year rose 1.7 percent, excluding gasoline—worse than Wall Street’s expectation of a 2.8 percent increase.

It also cut its profit forecast for its fourth quarter, which began on November 1.

As in the past, when sales take a dip in the winter, Wal-Mart blamed....the weather:

Vice Chairman Eduardo Castro-Wright said the company, which last month projected growth at the higher end of the quarter’s predicted 1% to 3% advance, said Thursday the holidays were more challenging than expected for retailers because of the economy and “severe winter weather” in some parts of the country.”

But the report this morning was a serious matter. It sent the market tumbling and others wondering if the retail sector would be able to recover at all any time soon. 24/7 Wall Street points out what some other stories seem to have missed - that for the first time in a while, Wal-Mart International has taken a hit as well:

Wal-Mart International has turned in sales improvement of 15% to 20% on a very consistent basis. In December of last year, that number fell by 10.4% to $10.7 billion. For the entire company, revenue was flat at $47.5 billion, which means that Wal-Mart US carried all of the load.

In many sales periods past, Wal-Mart has relied on strong international sales to boost the company while same store sales in the U.S. remain mostly flat. And Wal-Mart has made no effort to hide the fact that it is concentrating much of its projected growth in the international sector, while slowing down at home.

Make no mistake about it: Mike Duke has his work cut out.

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If you didn’t catch it, Lee Scott came out of hiding Sunday for a “roundtable” on the state of the American economy on Meet the Press, along with Gov. Jennifer Granholm, Fmr. Gov. Mitt Romney, Fmr. Hewlett-Packard CEO Carly Fiorina, and Google CEO Eric Schmidt.

We were holding out hope that David Gregory would (in his first ever show) make a splash by grilling Lee Scott on wages and labor practices, but we weren’t too surprised when it didn’t happen. Gregory did at least point out that Wal-Mart has taken flak on health care and “driving down wages,” but Lee Scott effectively dodged the question - by mentioning that his company had added new jobs and saying how he “reached out” to the Obama administration on America’s economic situation. Unfortunately, no follow up was asked. CQ posted the transcript:

GREGORY: Lee Scott, you know, you’ve been criticized at Wal-Mart on, on health care issues, on driving down wages. As a business leader, and when you think about your successor at Wal-Mart, do you have a responsibility to help Washington with the employment picture?

SCOTT: Well, we’ve been fortunate this year with our business to have added 30,000 jobs here in the U.S. We’ve improved our health care, we’ve improved, I think, the general opportunity of our associates. So, criticisms aside, I think Eric’s exactly right. These are not times to be self-serving, and that’s why we have reached out to the new administration and said, “We want to be a partner on these things.”

We’re glad that the line about health care and wages made it into the show, but other than a testy back-and-forth between Granholm and Romney on the auto bailout, the rest of the conversation was pretty disappointing. There were some interesting points made, but every other question Lee Scott was asked was a big, fat basketball-sized softball that let him run down the talking points about consumers trading down and why they need Wal-Mart more than ever.

No basic questions about the whether Americans’ wages are too low, and if so who is going to be the one who starts raising them. Nothing on whether passing the Employee Free Choice Act could be a stimulus plan for America’s middle class. And nothing on whether Lee Scott’s company - which by all rights is profiting wildly from the recession - actually wants it to end. And if it does, what it’s prepared to do for its workers to make that happen.

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As the rest of the country slides into recession, Wal-Mart continues to ride high. Retail Metrics, a retail research firm, projects that Wal-Mart will post a record profit of $13.7 Billion this year - higher than the country’s next three retailers - CVS, Home Depot and Lowe’s - combined.

According to my calculations, it would take an average Wal-Mart worker making $10.86 an hour 144,008 years (working 24 hours a day, 365 days a year) to earn 13.7 billion dollars.

US Retailers Looking At Losses For 2008, With 4Q Not Helping [Dow Jones Newswire via Wall Street Journal]:

At least two dozen publicly traded retailers are on pace to show a loss for 2008, with the fourth quarter, usually the industry’s best period of the year, in many cases contributing to the red ink.

Saks Inc. (SKS), Dillard’s Inc. (DDS), Pacific Sunwear of California Inc. (PSUN), Talbot’s Inc. (TLB), Borders Group Inc. (BGP), and Zale Corp. (ZLC) are all seen posting earnings deficits for their current fiscal year, according to Retail Metrics, whose data are based on analysts’ estimates.

Rite Aid Corp. (RAD), which is contending with heavy debt as well as management turnover, is projected to show the biggest loss in the Retail Metrics group, at almost $1.5 billion for 2008.

Circuit City Stores Inc. (CCTYQ), now operating under Chapter 11 bankruptcy protection, is second, with analysts seeing a $314 million loss for the year. Building Materials Inc. (BLG) is pegged for a $154 million loss.

The diverse group also includes Saks, Talbot’s, Dillard’s, Pacific Sunwear of California, Zale and Borders Group and all are expected to see a loss for 2008.

The projections for significant red ink illustrate how deep the morass is for the retail industry, with fourth-quarter results projected to be soft and raising questions about just how bad next year might be.

“There isn’t much good news out there, and conditions are not improving,” said Ken Perkins, head of Retail Metrics.

Of the 40 retailers that Retail Metrics tracks, just 16 are expected to post a profit for 2008, which for most of the group is a fiscal year that concludes at the end of January.

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