October 17, 2006
What Constitutes News About Wal-Mart?
Posted by Gordon Smith

The front page of the NYT website featured two stories about Wal-Mart early this morning:


The first story is obviously big news. Wal-Mart is hoping to purchase Trust-Mart, a chain of hypermarkets ("giant stores that sell a wide range of general merchandise and food") in China. The purchase would double Wal-Mart's presence in China and would place Wal-Mart in contention for the title of largest retail chain in the country.

That second story is about 100 workers at a Wal-Mart store in Hialeah Gardens, Florida who were protesting a rollback of their working hours. The resolution:

Wal-Mart officials said the top manager at the store had violated company policy by reducing hours across the board, instead of doing it the usual way by reducing hours here and there to take into account the needs of particular departments and shifts.

What constitutes news about Wal-Mart? Everything!

At some point during the past few years, Wal-Mart became more than a company. It became the embodiment of capitalism. As a result, debates about workers, international trade, community development, health care, corporate social responsibility, etc. all occur in microcosm in Wal-Mart. Unfortunately for Wal-Mart, its symbolic value makes it a prime target for anyone wanting to score points against the status quo.

On a related note, I finally watched Frontline's well-traveled feature "Is Wal-Mart Good for America?" (which is available online). I am planning to write something academic about Wal-Mart and its critics, and that may be a more appropriate place to evaluate Hedrick Smith's production. For the present, I will say only that I found the piece disappointingly shallow (with startling revelations like the fact that Wal-Mart attempts to lure unwary customers into the store by using heavily discounted "opening price points") and surprisingly xenophobic (it focused almost as much on China as on Wal-Mart).

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October 02, 2006
Wal-Mart's Voter Registration Drive
Posted by Lisa Fairfax

Last week Wal-Mart announced a voter registration drive for its employees, apparently the largest such drive by a private employer.  Wal-Mart is sending registration forms to its employees with prepaid postage.  Wal-Mart also is allowing its employees three hours of paid leave to visit the polls if their shifts do no allow for such time off. 

Of course their registration drive was met with criticism.  Wal-Mart's director of media relations does not deny that Wal-Mart's voter registration drive was prompted by recent criticism from politicians who have taken aim at Wal-Mart and its policies.  Others point out that Wal-Mart often has hampered the efforts of independent groups to conduct registration drives on Wal-Mart properties.  Regardless of the motivation, I think you have to be happy with any corporation's effort to get out the vote.  Arguably one of the reasons why Wal-Mart gets so much attention is because it is so large and hence its policies have a broad impact.  From that perspective, we should appreciate when Wal-Mart launches a program that has a positive impact on its employees and the larger community, and hope that its efforts prompt other large employers to do the same.

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September 25, 2006
"Big Box Tool Kit"
Posted by Gordon Smith

Today's W$J has a front-page story on Wal-Mart's woes in Boston, and the story refers to a new website called "Big Box Tool Kit" (launched today), which offers information for people who are "working to stop or prevent sprawling big-box development" in their communities. The website is maintained by  the Institute for Local Self-Reliance, which was founded in 1974 and is based in Minnesota. Though the Big Box Tool Kit does not distinguish among big-box retailers, the map of communities that are "fighting a big-box project" reveals the heavy focus on Wal-Mart (W), as opposed to Home Depot (H) or Target (T).


The poster child for this sort of activity in central Massachusetts is Arthur P. DiGeronimo Jr.:

Mr. DiGeronimo, 54, is a native of Leominster, a city of 41,000 in the rolling hills of central Massachusetts. Business-savvy and well-spoken, he is a community fixture, having run a grocery-store chain started by his Italian immigrant family until its sale in 2004. He now owns a sound and video equipment company.

Mr. DiGeronimo says Wal-Mart's arrival will hurt the area's nine grocery stores and half-dozen department stores. Driving through the city in his pickup truck, he argues that Wal-Mart won't improve residents' well-being. "It is a question of the quality of life that's become important for a lot of communities," he says.

Another example:

Ms. Harvey and her husband John, both 35, didn't actively oppose the Leominster store plan, even though their house is technically within city limits. The second site, by contrast, is directly across from their home. Ms. Harvey says she used to shop at Wal-Mart when her children were small but stopped after encountering Wal-Mart critiques, such as the documentary, "Is Wal-Mart Good for America?" Wal-Mart "doesn't fit the character of the town," Ms. Harvey says.

I am attempting to steer clear of glib cynicism about the anti-Wal-Mart movement, but it's hard to ignore the opportunistic use of anti-Wal-Mart rhetoric by a potential competitor and a NIMBY.

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September 22, 2006
The Case For Wal-Mart: Part I
Posted by Gordon Smith

Thanks to a tip from my student, Ray Ro, I just watched Wal-Mart CEO Lee Scott on Charlie Rose. They touch on all of the hot-button issues here, with special emphasis on Wal-Mart's new environmental initiatives.

Speaking of environmental initiatives, Wal-Mart announced today that it will use its purchasing clout to push for packaging changes through the Wal-Mart Sustainable Packaging Value Network:

Wal-Mart Stores, Inc. today announced plans to measure its 60,000 worldwide suppliers on their ability to develop packaging and conserve natural resources. This initiative, scheduled to begin in 2008, is projected to reduce overall packaging by five percent.  The announcement came at the conclusion of the Clinton Global Initiative in New York City....

On November 1, 2006, Wal-Mart will introduce a packaging scorecard to more than 2,000 private label suppliers. This is a tool that will allow Wal-Mart buyers to have all the information about packaging alternatives or more sustainable packaging materials in one place, allowing them to make better purchasing decisions.

On February 1, 2007, tools and processes will be made available to all of the company‚Äôs global suppliers.  For 12 months, these suppliers will learn and share results within this process.  And beginning in 2008, Wal-Mart will measure and recognize the entire worldwide supply base for using less packaging, utilizing more effective materials in packaging, and sourcing these materials more efficiently through a packaging scorecard.

Richard Branson was at the Clinton Global Initiative, too, committing an estimated $3 billion over 10 years to renewable energy initiatives.

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The Case Against Wal-Mart: Part I
Posted by Gordon Smith

As I have mentioned, I am on a panel at the AALS meeting in January discussing Wal-Mart, and I have assembled a collection of Wal-Mart books in preparation for the event. (Note that I am planning to say some nice things about Wal-Mart, though I am not interested in being Wal-Mart's advocate. The books about Wal-Mart are overwhelmingly negative.)

Yesterday, I started reading The Bully of Bentonville by Business Week reporter Anthony Bianco, and I have taken the title of this post from his first chapter. My plan is to catalog the major complaints against Wal-Mart and, in time, to subject those complaints to more rigorous analysis than is possible in a soundbite. For the moment, I am just collecting complaints, and I thought I would share some thoughts as I go along. Of course, you are most welcome to add thoughts, as I am looking to educate myself.

My first entry relates to Wal-Mart's effect on competing firms. Bianco writes:

What in an economist's language sounds like a bloodless program of national self-improvement is in fact a brutal, Darwinian struggle spilling blood in every shopping mall and factory. Failure to measure up to the demanding efficiency standards set by Wal-Mart has crippled thousands of businesses -- not just corner grocers and family hardware stores, but also the billion-dollar likes of Kmart, Toys 'R' Us, and Winn-Dixie.

When I read anything, I try to use the principle of charity, so I will state up front that I know Bianco is packing a lot into this paragraph, and some unpacking would probably make some of his claims less ridiculous than they seem on their face. But I come at this having studied Kmart in the mid-1990s, and I have little sympathy for the fact that Kmart had difficulty keeping pace with Wal-Mart's "demanding efficiency standards." Kmart's stores were older than Wal-Mart's, and Kmart had not mainained their stores very well. If you visited a Kmart in the late 1980s and early 1990s, you probably remember them as dimly lit and grungy. Moreover, Kmart did not have an effective system of tracking inventory, so they often ran out of items that customers wanted. Wal-Mart did us all a favor.

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September 04, 2006
Wal-Mart Books
Posted by Gordon Smith

As I have mentioned previously, I am slated to speak on a panel about Wal-Mart in the January meeting of the AALS. So this afternoon -- on my last free day prior to the start of the fall semester -- I visited Borders to check out the cottage industry of books relating to Wal-Mart. I ended up buying several of them, though there appears to be lots of redundancy.

By the way, just for fun I searched the journals and law reviews database (JLR) in Westlaw and found 5799 documents mentioning Wal-Mart!

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August 20, 2006
What I Will Not Say In Defense of Wal-Mart
Posted by Gordon Smith

In January I am on a panel discussing Wal-Mart. My assignment is to provide some balance to the panel on the pro-Wal-Mart side, but I won't be taking my cues from Andrew Young:

Young was asked whether he was concerned Wal-Mart causes smaller, mom-and-pop stores to close. "Well, I think they should; they ran the `mom and pop' stores out of my neighborhood," the paper quoted Young as saying. "But you see, those are the people who have been overcharging us, selling us stale bread and bad meat and wilted vegetables. And they sold out and moved to Florida. I think they've ripped off our communities enough. First it was Jews, then it was Koreans and now it's Arabs; very few black people own these stores."

Yikes! Young has since resigned from Working Families for Wal-Mart, which is hoping to boost Wal-Mart's public image.

HT Ideoblog.

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July 28, 2006
Beating Wal-Mart at Its Own Game
Posted by Gordon Smith

Wal-Mart has decided to exit from Germany, eight years after entering the market. German retailers beat Wal-Mart with low prices. From the W$J:

After Wal-Mart acquired two small, struggling German retail chains eight years ago, it ran up against several problems. It found itself being underpriced by local retailers called hard discounters, such as Aldi. German shoppers flock to these stores, which sell a limited selection -- often 850 to 1,000 items, compared with 100,000 at Wal-Mart -- and stock mainly their own store brands.

Some 80% of German consumers are about 20 minutes from an Aldi, according to Nestle's research. The hard discounters account for about 40% of the German retail market, compared with Wal-Mart's share of less than 2%, analysts say.

German shoppers are accustomed to buying merchandise strictly based on price, German retail consultants say. They are willing to buy laundry detergent at one store and then go to another to get a better price on paper towels. That behavior is called "basket splitting." It is the antithesis of what American shoppers like: one-stop shopping. A big plank of Wal-Mart's strategy in the U.S. and elsewhere is getting shoppers to turn to it for an increasingly wide array of goods.

According to the article, this is not the only international problem for Wal-Mart. It's worth a read.

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