Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.
This week’s issue begins with a new study from the group Good Jobs First, which reveals that cash-strapped states are forgoing a total of roughly $1 billion annually in tax revenue because of little-noticed laws that permit retailers to keep a slice of the sales taxes they collect for the government. In fact, the study finds thirteen states do not cap the amount that a retailer can receive as vendor compensation for collecting sales tax, resulting in millions of lost tax dollars.
A large focus this week is also on Wal-Mart’s announcement that Lee Scott will step down as CEO in February 2009, to be replaced by Michael Duke, Wal-Mart’s Vice Chairman of its International Division. In addition to the CEO change, you’ll find stories on the battle over the Employee Free Choice Act, how Wal-Mart will deal with the Obama Administration from a labor perspective, and related news on Wal-Mart’s labor battles in Canada.
And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. Wal-Mart has founded a new consumer group in New England geared towards fighting Wal-Mart opponents, and has purchased its own wind-energy supply based out of Odessa, Texas
Wal-Mart Watch Weekly Update for Elected Officials [November 21, 2008]
Posted by Corey Himrod | Permalink
According to Good Jobs First and The Wall Street Journal, a large chunk of sales tax revenue gets redirected to retailers like Wal-Mart, a company that pockets an estimated $70 million a year in sales tax revenues.
At least that is the finding of a report released today by Good Jobs First, a nonprofit research group here in Washington:
Most of us don’t realize that in a majority of states with a sales tax, a portion of the money actually goes into the pocket of the retailer under programs set up by state and local governments. In this first-ever comprehensive national analysis of the subject, Good Jobs First finds that the public sector is losing more than $1 billion a year through these sales-tax diversions. A large share of revenue gets redirected to giant retailers such as Wal-Mart, a company we estimate pockets more than $70 million a year in sales tax revenues.
The state laws discussed in the report allow retailers to keep a portion of sales-tax revenue to offset the cost of collecting the funds in the first place, a reasonable enough excuse (especially since state governments are so flush with cash at the present). But does anyone really, and I mean REALLY, believe that Wal-Mart spends $60 million a year collecting sales tax? In this age of computer everything and electronic money transfers, I have a hard time believing it costs more than a fraction of that.
As it stands, many states have calculated a vendor compensation rate, which can be applied to a percentage of sales tax revenue to determine how much a retailer gets to keep for its trouble. As the WSJ reports, Good Jobs First has identified 13 states that impose no ceiling on the total amount retailers can keep. In states such as Illinois, Texas, Pennsylvania and Colorado that vendor compensation rate can be applied to the full amount of sales tax a company collects, resulting in substantial returns for companies like Wal-Mart. Good Jobs First has estimated the givebacks in these states - Illinois ($126 million), Texas ($90 million), Pennsylvania ($72 million), and Colorado ($69 million). Jesse Drucker at the WSJ kindly puts some perspective on those numbers - for example, the $90 million Texas gives away by not capping vendor compensation would cover the $82 million price-tag needed to fund that state’s primary pre-kindergarten program.
For what its worth, the Illinois Revenue Department was quoted as saying the state has tried to cap the compensation program, but relentless lobbying by the retail industry has so far kept legislators from making changes.
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Posted by Corey Himrod | Permalink
Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.
This week’s issue begins on Wal-Mart and the economy, and whether Wal-Mart sales statistics can be used as a new barometer for the U.S. economy. You’ll also find stories on changes in shopper behavior, now that consumers are faced with less disposable income. And, you’ll find stories on Wal-Mart’s slowed growth, and the switch to smaller store formats by retailers across the country.
In addition to the economy, you’ll find stories related to next week’s election. Barack Obama highlighted the story of a 72-year-old man forced to go back to work for Wal-Mart in his half-hour special this past Wednesday night. Meanwhile, according to Reuters Wal-Mart vows to remain non-partisan in the 2008 election season, while the Financial Times reports on the candidates attempting to woo the so-called “Wal-Mart Moms.” Plus, there are suspicions that Wal-Mart is behind a new grassroots group recently set up to fight the Employee Free Choice Act, as reported in The National Journal.
Also: Find out whether a Wal-Mart case in Montana could lead to changes in that state’s campaign finance law.
And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe. A California ballot measure could lead to increased demand for more humane animal products, while citizens in Virginia continue to fight Wal-Mart’s attempt to build near an historic Civil War battlefield.
Wal-Mart Watch Weekly Update for Elected Officials [October 31, 2008]
Posted by Corey Himrod | Permalink
We blogged about this yesterday, what with the double taxation in Connecticut and the various state officials telling Wal-Mart to stop. Well, the Hartford Courant obtained a copy of CT AG Blumenthal’s letter to Wal-Mart, and here it is. A sampling:
Please review with your Connecticut stores whether they are complying with Connecticut law, and report back to me your findings. If they are not complying, please report to me how you intend to refund customers for sales tax erroneously charged, and how you intend to ensure that your store and employees comply with Connecticut law in the future.
I return, yet again, to my favorite quote from yesterday‘s article:
[Wal-Mart] spokesman Dan Fogelman said Monday evening that although he has no idea what Connecticut state tax law is, his company is following it.
Dan and Wal-Mart better do their homework…
Connecticut Attorney General letter to Wal-Mart
Posted by Corey Himrod | Permalink
George Gombossy and the Hartford Courant continue to follow this issue, which has taken a turn in favor of the consumer. Numerous complaints made to the Courant caused both Governor Rell and Attorney General Blumenthal to take notice. The complaints were from consumers charging that major retailers have been violating state law by charging a second sales tax when merchandise paid for with cash is exchanged. Governor Rell ordered the state revenue department investigate the practice, and now AG Blumenthal has sent a letter to Wal-Mart telling the company’s general counsel in an oh-so-kindly way to please knock it off with the double taxation.
“Wal-Mart should refund any consumer who was denied a refund of sales tax on returned goods or charged a sales tax on even exchanges,” Blumenthal wrote to Sam Reeves, Wal-Mart’s division general counsel.
My favorite part of this story so far though has come from our good friend, Wal-Mart spokesman Dan Fogelman, who defended Wal-Mart’s policy.
Spokesman Dan Fogleman said Monday evening that although he has no idea what Connecticut sales tax law is, his company is following it.
That’s right - despite his cluelessness to the law and the company’s refusal to discuss why the accusations of so many customers are wrong, Fogelman can guarantee Wal-Mart is following state tax law to the tee. I love blanket statements with nothing to back them up.
Blumenthal Targets Wal-Mart on Sales Tax [Hartford Courant]
Posted by Corey Himrod | Permalink
The Hartford Courant has been following this story, and apparently the complaints against Wal-Mart have been increasing. Consumers have increasingly suggested that Wal-Mart has to be violating some state law by requiring them to pay tax again on exchanges made without receipts. Actually, according to the Connecticut Revenue Department, additional sales tax cannot be charged if a store has an even exchange policy. In his blog, the Courant’s George Gombossy came to the following determination:
My conclusion is that not only is Wal-Mart violating state laws by charging tax again without receipts, but is letting its employees falsely blame the state.
Gombossy points out that on its website, Wal-Mart says: “You can replace, exchange, or get credit for an item immediately in a store, pending product availability.”
The issue is now with the state’s Consumer Protection Department.
Consumer Protection reviewing Wal-Mart’s double tax policy [Hartford Courant]
Despite complaints from customers of its stores throughout Connecticut, Wal-Mart insists that it’s following state tax laws by requiring them to pay tax again on exchanges made without receipts.
My conclusion is that not only is Wal-Mart violating state laws by charging tax again without receipts, but is letting its employees falsely blame the state. But you be the judge.
The law seems clear:
Read the rest of this story ...
Posted by Corey Himrod | Permalink
According to Wal-Mart, Wal-Mart China’s sales growth is “very like 25, 30 plus percent a year”. What Wal-Mart refuses to reveal, however, is how much 25 or 30 plus percent a year equals, in ‘like’ money or ‘like’ profit. Wal-Mart also refuses to reveal “what portion of global sales come from its more than 100 stores in [China],” Reuters reports.
The truth of Wal-Mart’s circumstances may be more accurately summarized by reports out of China which note that within its 12 years in China, Wal-Mart has failed to become profitable. And even according to data from China’s Department of Trade, Wal-Mart’s rank within the retail sector has plummeted from 17th in 2003 to an astonishingly low 30th in 2005.
The truth is that Wal-Mart is being crushed by ever increasing competition and much needed government regulation. And even with such great buying power, Wal-Mart is losing influence with supplier factories who are raising their prices.
Unfortunately for Wal-Mart, China may end up being another South Korea, or worse, Japan. Investors beware!
Posted by Michael Mignano | Permalink
Connecticut Governor M. Jodi Rell is ordering the state revenue department to revue possible tax law violations by major retail chains within the state.
According to the Hartford Courant:
Gov. M. Jodi Rell appears to doubt the state revenue services department’s assertion that it is “on top of” complaints from consumers that major retailers in Connecticut are violating state laws by charging a second sales tax when merchandise paid for with cash is exchanged.
This practice has apparently been the subject of many complaints in the Constitution State, where sales tax cannot be charged on an exchange item if a retailer has a policy of permitting exchanges on identical items purchased with cash and without a receipt.
The Courant’s “CT Watchdog” column has been stirring the issue up for a few weeks now - dozens of people have written in to the paper to share their story of double taxation. There seems to be a couple of things going on here. The first question is whether retailers are acting illegally by charging sales tax on identical exchanges where sales tax was paid at the initial point of purchase - this becomes a bigger deal the more expensive the item being exchanged becomes. The second question is where the additional sales tax has been going...has the state revenue department been quick to address complaints related to this practice?
The Governor’s office apparently thinks it has not, so we’ll just have to keep watching to see if penalties end up being levied.
Gov. Rell to order tax department to look into state tax law violations [Hartford Courant]
Posted by Corey Himrod | Permalink
WAL-MART AND THE ‘POORING OF AMERICA’
I’m not sure where the phrase “Pooring of America” came from, but it’s perfect to explain Wal-Mart’s effect on working families. Seeking Alpha ponders why Wal-Mart and McDonald’s are doing so well right now.
What are McDonald’s and Wal-Mart Telling Us? [Seeking Alpha]
I am very intriqued by our top 2 choices for the “Pooring of America” trend - Walmart (WMT) and McDonalds (MCD) - what exactly are the charts above telling us? If we are to enter a long drawn-out recession, which I have believed, these seem to be screaming buys here. The only question is credit - how does a lack of credit potentially hurt both. They are not expanding a ton, in the U.S. at least - perhaps with Wal-mart it’s financing of inventory, but I cannot wrap my mind around this behavior.
Wal-Mart gets downgraded while stock up in 2008 amid the turmoil [BloggingStocks]
Will Wal-Mart weather the storm? To a point, it already is. Sure, all retailers are expected to have a dismal holiday season this winter, but Wal-Mart will do better than the competition. It has more stores, more pricing leverage and more wherewithal to hold customers hostage with lower prices and inventory turns at a time when it’s needed most. Perhaps we’ll see WMT return to the $60/share level by Thanksgiving—if not sooner.
Read the rest of this story ...
Posted by Alex Goldschmidt | Permalink
Check out this week’s issue of the Wal-Mart Watch Weekly Update for Elected Officials – a compilation of Wal-Mart news from across the country and beyond.
This week’s issue focuses on Wal-Mart and the current economic crisis. You’ll find stories on how Americans are shifting to thrift stores in order to save money, and whether September’s retail sales figures reflect a downturn in consumer spending. You’ll also find an article from CNN Money discussing whether the state of the economy will affect Wal-Mart’s hiring, especially with the holiday season coming up.
In addition to the economy, you’ll find stories on Wal-Mart’s move to small stores. Are Wal-Mart’s Marketside Stores the wave of the future? And in health care news, Wal-Mart is rolling out electronic personal health records to all of its employees, and has announced changes to its health plan for 2009.
And finally, check out our “Stateside” and “Wal-Mart International” sections to find out what’s going on with Wal-Mart around the country and across the globe.
Wal-Mart Watch Weekly Update for Elected Officials [October 10, 2008]
Posted by Corey Himrod | Permalink
A story out today from Advertising Age has an in-depth break down of Wal-Mart’s current business and marketing strategy. Most retailers are scrambling to stay afloat as the economy declines, but in the last month Wal-Mart has seen rises in both its stock price and profits.
Shoppers are trading down, and Wal-Mart is as low as they can go. A bad economy has always been good for Wal-Mart, and today’s recession-like atmosphere is no different. Wal-Mart’s execs claim the recent boost in sales is due to a “strategic three-year plan,” but most analysts agree: when the going gets tough, the tough go to Wal-Mart.
“But,” says one analyst quoted in the article, “there is a chink in the armor of Wal-Mart, which is these customers are not saying they necessarily feel loyalty.” Though more people are shopping at the low-price retailer, they’re not likely to stay. Wal-Mart’s only advantage is its prices: customer service, product quality and company ethics are all secondary objectives, and shoppers know that. Brand loyalty might not be a problem for Wal-Mart now, but once the economy improves the company could face the consequences for putting low prices above all else.
Wal-Mart Grinning Big Through the Tough Times [Advertising Age]
Looking for a silver lining in the economy? It’s shining brightly from Bentonville, Ark.
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Posted by Alex Goldschmidt | Permalink
Wal-Mart stockpiles massive amounts of information about its customers. The retailer’s databases are enormous - bigger than the internet - and the information contained on its servers includes everything from which aisles shoppers choose to go down to the time of day chocolate milk sells quickest.
Now, the statistics firm ACNeilson (best known for its TV viewership ratings) is taking Wal-Mart’s data and helping the retailer understand its shoppers even better. At a recent conference of Wal-Mart suppliers, Neilson reps broke down how many cartons of eggs, car parts, and bags of dog food Wal-Mart customers buy each year. The study also revealed the average household incomes of Wal-Mart’s shoppers, the average number of trips each shopper makes and how much shoppers spent at the stores, on average. Ultimately, Wal-Mart hopes to use this information to customize store inventories and increase profits.
The study comes at a time when political analysts everywhere are desperately trying to understand Wal-Mart’s core demographic. “Wal-Mart Moms” may be the key to November’s election, some pundits say. Political alignment might not have been on Neilson’s questionnaire, but the study does provide some insight. According to Neilson, the average Wal-Mart shopper is a “pet-loving, pasta-eating, car-driving, gadget-obsessed dieter who either doesn’t care for cheese or buys it elsewhere.” (That part about the cheese may or may not impact the election directly.)
The data in the study doesn’t provide a complete picture of Wal-Mart’s shoppers - and it certainly doesn’t encompass all of the middle-aged women being wooed by politicians - but Wal-Mart is trying harder than ever to win over “the core female head of household” i.e., the “Wal-Mart Mom.” The retailer isn’t alone in catering to this powerful group not alone, and who knows - maybe quality dog food actually is the secret to winning the presidency in November.
Marketing firm looks at Wal-Mart shopper, trends [NW Arkansas Morning News]
Posted by Alex Goldschmidt | Permalink
This piece originally appeared on the Huffington Post
It is football season again and fans in communities across the country are turning out for high school games. They are probably wearing sweatshirts, t-shirts and other gear to cheer their local team. Unfortunately, if those fans bought their clothing from their local Walmart store, their team is not getting any financial support, and that means that the games may be numbered.
We recently received reports from all over the country about Walmart selling high school logo sportswear without the schools’ permission and without donating any of the profits. As a result, fundraising efforts are undercut and already thin school athletic budgets are stretched even further as local residents buy cheaper versions at Walmart.
The practice has likely been ongoing for years, but current economic problems and shrinking school budgets may be the catalyst for some schools to take a closer look at how Walmart’s effort puts a dent in their local programs.
It started on September 4, when KXLY-4 News out of Washington state reported that a local Wal-Mart was selling Cheney High School athletic gear without permission, and without donating any of the profits.
Several days later, the Kingsport Times-News reported that Science Hill High School in Johnson City, Tennessee has repeatedly complained to Walmart about the practice and the school attorney has sent cease-and-desist letters. Then, last Friday - the Cheney Free Press reported that a host of schools in the Washington state area have been complaining about the same problem.
Read the rest of this story ...
Posted by David Nassar, Executive Director | Permalink
WAL-MART EARNS BUCKETS OF MONEY
In case you weren’t aware.
Winners and Losers [Floyd Norris on the New York Times]
As the stock market goes back to gyrating –the Dow has been up more than 100 points, and down more than 200, during the first two hours — here, courtesy of Howard Silverblatt of Standard & Poor’s, are the Lucky 13 and the Unlucky 13 for this year.
Lucky 13:
1. WAL-MART +$52.1 billion
MAN IT FEELS GOOD TO BE A WALTON
The Walton family is worth over $100 billion. Discuss.
The Waltons: SUPER DUPER RICH!!! [WakeUpWalMart.com Blog]
Of course there is nothing wrong with this family being so absurdly wealthy. No, our objection is that they make their profits on the backs of their workers by mistreating them and paying them poverty level wages. Contrasting a typical Wal-Mart workers wage with the Walton families wealth is mind boggling, and more than a little depressing. For example, it would take someone making $20,000 a year (which is a relatively high wage for your typical Wal-Mart cashier) on million years to net the amount of money one Walton sibling is worth.
If I Were A Rich Man… {Smart Profits Blog]
Warren Buffett with 50 billion takes second while Lawrence Ellison comes in at third with significantly less: a mere 27. Then fourth, fifth, sixth and… sixth… are all Waltons, somehow or another tied to WalMart founder Sam Walton. Jim Walton possesses a cool 23.4 billion, his brother S. Robson Walton has slightly less at 23.3, while their sister Alice Walton and sister-in-law Christy Walton tie at 23.2.
Walton Family Dots 10 Richest Americans List [Family Store Online]
Jim Walton, son of Wal-Mart Stores Inc. founder Sam Walton, reclaimed a leading spot this year at No. 4 with a $23.4 billion fortune after falling off last year. ... Eldest brother Robson Walton, 64, comes in a close second with $23.3 billion, landing him in the No. 5 spot. He is chairman of Wal-Mart. WHAT’S IN **YOUR** WALLET?
Forbes 400 richest out [Writing on the Wal]
The Walton’s, still the friends of downtrodden shoppers everywhere…
Forbes 400: List of the Richest Americans [Young, Famous and Fashionable]
The Walton family are all stinkin rich, controlling abt 40% of the worlds largest retailer,
illegal child labor marti meanworkers can’t unionize martwoops.. i mean Walmart, with abt $23B each.
After the jump, shopping for groceries, reasons not to shop at Walmart, and sure signs the economy is REALLY bad.
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Posted by Alex Goldschmidt | Permalink
The past couple weeks have seen plenty of stories describing ways in which Wal-Mart has mobilized to aid the Gulf Coast in preparation and relief efforts during hurricane season.
It seems, however, that even though the corporation was making efforts to lessen the blow of the storm, they still haven’t lost sight of the bottom-line. In a story posted yesterday in The Examiner, Wal-Mart was accused of price-gouging gasoline at one of their stations along an evacuation route in Southeast Texas. The Wal-Mart/Murphy USA located on U.S. 69 in Lumberton raised their price of gasoline a total of 12 cents in the day leading up to the evacuation for Hurricane Gustav, then another 10 cents when the evacuation was announced.
These prices were NOT consistent with other gas-stations in the area and following the storm, prices dropped again to reflect market prices. And despite a gas station manager claiming that prices went up because of a “gas price rise”, the cost of oil per barrel dropped over each of the three days.
Evacuation Gas Game [The Examiner (Texas)]:
In the days and hours leading to the potential call for a mandatory evacuation for Southeast Texas residents the Texas Department of Transportation (TxDOT) blasted across its electronic billboard alert system that a hurricane was coming and residents needed to fill up their tanks with gasoline.
According to a local wholesale fuel provider, most everyone heeded TxDOT’s advice, but The Examiner also kept close watch on one gasoline retailer located along the main evacuation route from Southeast Texas.
Read the rest of this story ...
Posted by Luke West | Permalink
In a story posted today from KXLY.com in Spokane, Washington, it seems that Wal-Mart has found a new market, in undercutting a local high-school. A Wal-Mart store in Cheney, Washington has begun selling shirts that bear the logo of the Cheney Blackhawks, the town’s high-school sports team. Wal-Mart does not pay the school royalties for using the logo, nor do they have permission from the school to sell the shirts and this is bad news according to the school’s Activities Director, Jim Missel who had this to say:
“They can buy their stuff at a larger quantity and be able to sell it at a cheaper price. It hurts us when this happens.”
Cheney High School uses revenues from their own apparel sales to fund school activities and athletic programs, and without that revenue, it becomes increasingly harder to finance such programs. Missel says he doesn’t want to start a war with Wal-Mart, but would likely appreciate some consideration for the situation. Wal-Mart told a journalist from KXLY that the company “tries to give customers what they want at a good price, while still being a good neighbor”.
The ironic thing is that by selling shirts with the Blackhawks logo on them, they are lessening the chance that Blackhawks athletic programs will even continue to exist. If anyone out there knows of this kind of thing happening in their town, feel free to tell us about it in the comments section.
Is Wal-Mart undercutting local athletic programs?
CHENEY - The start of the 2008 football season hits Thursday night, but if you’re looking to get into school spirit there’s at least one team on the West Plains that hopes you consider where you buy your gear from.
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Posted by Luke West | Permalink
Several stories were published this week regarding Wal-Mart’s newest way to annoy the already frazzled American shopper - the “Smart-Network.” Set to launch in close to 300 stores by the holiday season and chain-wide by 2010, the in-store TV marketing network will include 27,000 screens and feature everything from time-specific advertisements to a series of ‘welcome screens’ to be displayed at store entrances. Stephen Quinn, chief marketing officer of Wal-Mart stores, discussed the new system in a story from Adweek:
“We’ve built a network tailored to the way consumers shop our stores, delivering helpful, custom content closest to the point of decision that helps them shop smarter”
“Smarter” is right: now customers won’t have to make shopping lists, decisions about what products are for them, or even have to open their eyes upon entering a Wal-Mart. All they have to do is listen for the comforting sound of a television screen beckoning them closer and closer to whatever Wal-Mart feels like selling them at that time. The company sank $10 million into R&D for this project, coming off slightly better-than-expected sales numbers for the month of August, and seems to show the company’s faith in the system.
Wal-Mart Smart Net Pushes Point-of-Sale Ads
Trying to reach additional shoppers, Wal-Mart has launched the Wal-Mart Smart Network, which supplies information via in-store TV. The company invested $10 million in the project billed as “shopper-intelligent network at retail.” Powered by Internet Protocol Television, the new net will appear in more than 2,700 stores nationwide.
Read the rest of this story ...
Posted by Luke West | Permalink
In an interview with the Wall Street Journal’s Ann Zimmerman, Chief Executive of Wal-Mart Stores USA Eduardo Castro-Wright discusses the company’s domestic retail strategy. Castro-Wright seems confident that the economy’s recent down turn has not been responsible for Wal-Mart’s sales boost: “I wouldn’t say a significant part of the current results is related to the economic environment. The changes in merchandising, marketing and improved service in the stores ... have vastly improved the shopping experience, and that will continue to drive sales after the economy rebounds.” This goes contrary to nearly every financial analyst’s views on the company’s current position, but you keep dreamin, Wal-Mart!
Posted by Alex Goldschmidt | Permalink
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