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The Age of Walmart on CNBC

I wasn’t feeling good tonight, so I tried to rest and turned on the
TV and saw this 2-hour special. I found it very interesting. I’m
wondering if anyone else saw it and what your thoughts were.

Among the many reasons I don’t like Wal-Mart, I came up with a
couple more after watching this program. First, there’s no way I’m
going to get paid minimum wage and have to attend a seminar that
starts at 7am on a Saturday morning and sing and dance the Wal-Mart
song… LOL Second, I never realized those employees getting
minimum wage are getting only a very small portion of their health
benefits paid. Personally, I’m disgusted. Another interesting
point was the portion about the Wal-Marts now moving into China and
how the top selling items in the stores are food. There were
interviews with consumers in China talking about how they were able
to get their food so much cheaper at Wal-Mart than at the local
farmers markets, so many small farmers are not going to be able to
make ends meet.

I know there may be a ton of arguments about this… but there is no
way someone can convince me that a Wal-Mart moving into a town and
eventually forcing the closure of 20+ small businesses and replacing
them with 400 Wal-Mart “associate” jobs paying $5.15 an hour with
little or no health benefits is a “good” thing and part of "global"
economy. Don’t get me wrong, I have nothing against “global
economy” - but let’s level the playing field here… If we are
going to be a player in global economy than I want to see a major
cut in taxes, housing and property taxes cut in half and I want my
health care paid for by the government.

I figure I probably won’t live to see the day… but in about 40
years everyone in America is either going to be a) working for the
government b) a member of the military (still in Iraq…), or c) a
Wal-Mart “associate”.

Sorry if I offend anyone with my views on this subject. I don’t
take many stands politically, but the issue with global economy and
companies like Wal-Mart really to get to me.

This [Orchid] is an affinity group meaning that we share thoughts on
our common interest i.e., metals, enamels, jewelry, lapidary and
perhaps a few others. One of those others is not politics, nor is
it Wal-mart.

I was pleased that something more important in the recent past was
not discussed on this forum. There are other more appropriate sites
for those who are so inclined to vent our feelings and our
positions. Please, let’s keep this forum focused on our common
interest: metals, jewelry and related area.


All the success of Wall Mart is not attributed to its policy and
management. A good deal of the credit goes to the Buyers, Employees
& our Laws

It offers employment to many who are willing to work for those wages
and meager benefits.

They are not forcing consumers to buy, quite a few are willing to go
there and buy their junk.

I use them as a convenient store Soft Drinks, Motor Oil etc.

Every industry uses cheap labor whenever they can. Gas stations,
Convenient Stores have Indians, Turkish & Middle Eastern. I. T. &
Financial companies are using Temporary workers on H1 Visas. Out
Sourcing is the new term for Bonded Labor in Third World countries.

All this is being done within the existing laws. I have a tenant who
works for Walmart in the Electronic section he manages Phones, TV,
Stereos Computers etc., Somedays he is sent home after 3 hours of
work. Last pay check for 2 weeks was for 39 hours. He is from
SriLanka with a green card. He has applied for his wife to come to
this country. He needs to show employment to be able to bring her
here. The INS will be impressed by the job description & the fact
that he is working for Walmart. He promises that once his wife makes
it to the US. He will go and look for a job & work off the books. I
have a feeling he would then become a good Walmart Customer.

Kenneth Singh

Kevin - I appreciate you bringing this to my attention. Without
going into any more specifics, I do think that how products are
marketed today and the prices they are selling for is something that
every business owner (including jewelry designers) needs to keep up
on - it’s the competition. And yes, no matter how hard it is to
believe, even Wal-Mart is the competition. I sold fashion jewelry
for 2 years before dropping it and moving on to a more higher-end
line. Believe me - those buyers want Wal-Mart prices. It keeps us
on our toes and forces us to always come up with new and inventive
ideas and designs - and stay one step ahead - without going broke.
So I think that the market and how products are marketed is something
very important to keep up on.


companies like Wal-Mart really to get to me 

What timing. There will be a Frontline broadcast on PBS stations
November 16: Is Wal-Mart Good for America?

From the website:

  FRONTLINE offers two starkly contrasting images: one of empty
  storefronts in Circleville, Ohio, where the local TV
  manufacturing plant has closed down; the other--a sea of high
  rises in the South China boomtown of Shenzhen. The connection
  between American job losses and soaring Chinese exports?

Visit the web site to read more:

Christine, not lovin’ Wal-Mart in Littleton, Massachusetts


With a small-town culture, Wal-Mart dominates The company had to
learn to do many things on its own because it started in little
Bentonville, Ark., but that helped it become a retailing power. Has
it gone too far?

By David Faber 8:57 AM EST November 10, 2004

Love it or hate it, Wal-Mart (WMT, news, msgs) is one of the
greatest powers American business has ever seen. This year its
annual sales will top $270 billion. It’s the largest private
employer in the United States with more than 1.2 million workers.

Wal-Mart sells more DVDs, groceries, bicycles, guns, diamonds,
engine oil, bedding, detergent, dog food, sporting goods, CDs, socks
and toothpaste than any other company in the world. It’s the
nation’s biggest film developer and optician, largest private fleet
truck operator, energy consumer and real estate developer.

To some Wal-Mart is an example of capitalism at its finest, a
company whose success allows people of limited means to live well.
To others, Wal-Mart is a predatory monster responsible for low
wages, suburban sprawl and lost jobs.

“They’re exploiting workers by the conditions that they have them
working under, by the low salaries that they pay them and by
depriving them of benefits that workers are entitled to,” says John
Sweeney, AFL-CIO president.

“If you listen to the outside world and you said, ‘why is Wal-Mart
different,’ the people who don’t particularly care for us might list
all things you might have asked me about, health insurance, wages or
whatever else. But the truth is, what makes us different is our
logistics, our systems, our culture,” says CEO Lee

Indeed, what’s important at Wal-Mart is sustaining the culture that
founder Sam Walton created. It’s a culture that expects managers at
all levels to wake up early and work long hours.

Early hours
It’s 5:30 a.m. when regional manager Pat Curran leaves her
Bentonville, Ark., home. Around the world in Shenzen, China, Joe
Hatfield, Wal-Mart Asia CEO, likes to hit the office by 4:30 a.m.
Every Saturday morning, Wal-Mart’s top execs get together at 7 a.m.,
citing their biggest sellers and going over the latest sales numbers.
Its semi-annual managers’ gathering starts at 6 a.m. and gets right
down to business. Even its shareholders have to get up early because
Wal-Mart’s annual meeting gets rocking by 7 a.m.

“It’s like our management meeting we have on Fridays and Saturdays,
and they’re early meetings, but they’re designed to get action
started before the day is over,” says David Glass, a Wal-Mart
director and former CEO. “I used to always come to work at 6:30.
That was just a time that worked out well for me. And when I’d get
here, Sam would always be here. He’d get here about 3 o’clock in the

Adds Scott, “David Glass has been retired for, gosh, four and a half
years now, semi-retired now, and I try to get in to work at 6:25
because he gets in at 6:30 and I just can’t stand the thought that
he might know more than me at first.”

Wal-Mart’s culture also comes from being in a small town.

“A lot of our competitors were headquartered in cities or operated
in cities where they had access to wholesalers and other services
that they could employ,” Glass says. “We didn’t have that. Being
located in northwest Arkansas … we had to do a lot of things for
ourselves. And initially, we created our own distribution logistics
network which served us very well. We were on the leading edge of
technology because we had to do that to control the growth. And as
we began to do things for ourselves, it gave us a competitive
advantage over the other folks.”

That small-town culture also creates an almost cult-like atmosphere.

Like almost everything else about Wal-Mart, the annual shareholders’
meeting is the biggest in the nation. More than 18,000 people from
around the world come to the Bud Walton Arena at the University of
Arkansas. Like many Wal-Mart events, it’s part pep rally, part
revival meeting, giving management another opportunity to spread the

But for all the cheering, Wal-Mart remains wary of the outside

“You can see us getting criticized more and more and even attacked
more and more,” says Jay Allen, a senior vice president of corporate
affairs. “The media, political leaders, it’s going to continue.”

Always improving
Wal-Mart can look paranoid. “I think it’s probably with good
reason,” Scott says. “There’s always somebody who’s just really
good, and if you ever get satisfied with what you’re doing, you’re
in real trouble.”

The focus on improvement usually leads to a focus on how to cut
costs. Wal-Mart is relentlessly efficient. Whether it’s the conveyor
belt that makes sure there’s no wasted space between goods moving
through one of its 110 distribution centers or the company’s health
benefits policy under which employees bear a significant cost, no
expense, large or small, is overlooked.

Scott and Chief Financial Officer Tom Schoewe earned a combined $14
million in stock and cash in 2003. But on business trips, the two
will share a $49 hotel room.

“Sharing rooms is a very symbolic part of what we do,” Scott says.
"It’s also an equalizer. If I’m asking the district managers to
share a room, but I won’t share a room with Schoewe, then what am I
saying? There are two different standards here? The customer is the
most important thing for all of you, but for me I think I’ll run a
different standard.

“You can’t do that. You can’t do it because it’s not how Sam would
have done it.”

Says Glass, “Sam has been gone for a number of years now, but he’s
still alive and well in this company to a great extent. There’s not
a day that goes by that I don’t hear conversations around here about
what Sam would do or how he felt about something.”


Posted 11/12/2004

Wal-Mart’s next victims The world’s largest retailing machine is
always looking for new worlds to conquer. Here are 5 that look
particularly vulnerable, including banking and electronics.

When Toys “R” Us said in August that stiff competition from mass
merchant Wal-Mart Stores was making it consider exiting the toy
business, the news struck fear in the hearts of retailers

After all, Toys “R” Us (TOY, news, msgs) pioneered the “category
killer” concept that’s now employed by big-box specialty stores like
Best Buy (BBY, news, msgs), Home Depot (HD, news, msgs) and Bed Bath
& Beyond (BBBY, news, msgs). The notion of creating giant specialty
stores that cater to a particular product segment has become a
staple of the U.S. economy. But Wal-Mart (WMT, news, msgs), the
antithesis of a category killer with aisles stocked with a vast
spectrum of products, is posing a dire threat to this way of

Wal-Mart had sales of $259 billion for fiscal 2004, ended Jan. 31,
ranking it as the world’s largest retailer. That sheer size has
vaulted it to the No. 1 spot in categories as disparate as food,
apparel, jewelry and home furnishings. For fiscal 2005, Wal-Mart
plans to add 310 new stores and 30 new Sam’s Clubs to its stable of
3,625 locations. Oppenheimer retail analyst Bernard Sosnick expects
that by 2010, Wal-Mart will have 3,000 supercenters, up from 1,600
this year, and total company sales of half a trillion dollars.

That kind of growth will make Wal-Mart No. 1 in plenty of other
product categories soon enough, and it will put an even tighter
squeeze on existing players in arenas that Wal-Mart already
dominates, like apparel and food. With a lion like Wal-Mart on the
loose, no store is ever safe, but here we’ve identified five
categories that that look particularly vulnerable to its looming

Consumer electronics
Wal-Mart is the second-largest consumer electronics retailer in the
U.S. behind Best Buy, but it won’t be for long. This spring, it
rolled out a private-label electronics line, ILO, which thus far
includes low-priced 42 inch plasma TVs, LCD monitors and DVD
recorders. That move put electronics stores large and small on
notice, as have Wal-Mart’s efforts to boost its brand partnerships,
introducing Sony and expanding its relationships with Panasonic and
RCA. Says retail analyst Howard Davidowitz, “They are going to fry
Best Buy’s brains out.”

The superstore has been trying to get into banking for five years,
but its efforts to buy banks in California, Oklahoma and Canada were
thwarted by regulators. Wal-Mart has a ready-made market at hand:
20% of the 100 million customers that come through its doors weekly
don’t have bank accounts. The chain already offers financial
services such as check cashing, bill payment and money orders, and
it boasts 28 Wal-Mart Money Centers, which are operated by SunTrust
Banks, as well as hundreds of other in-store bank branches. The
company says it has no plans to get into retail banking, but
industry sources say Wal-Mart is still pushing this agenda quietly
and is expected to take another run at banking again.

Wal-Mart ranks fourth in the pharmacy business, behind giants
Walgreen, CVS and Rite Aid, according to the National Association of
Chain Drug Stores. But it is upgrading its profile, rolling out a
handful of 24-hour pharmacies in August. Pharmacies are low-margin
propositions, and people with health insurance who pay only
co-payments aren’t price-sensitive. That could put a kink in
Wal-Mart’s strategy of squeezing supply chains to push down retail
prices. But for the shoppers who don’t have insurance, many of them
its customers, Wal-Mart’s brand of competitive pricing would be just
what the doctor ordered.

Gas pumps are a huge traffic driver for Wal-Mart. There are 1,555
stations on Wal-Mart properties, 300 of which are operated directly
by Wal-Mart’s warehouse arm Sam’s Club and the rest by third-party
vendors like Murphy USA (MUR, news, msgs). Launched in 1996, its
pumps already have a 3% share of U.S. retail gas sales – the 10th
largest in the U.S. As Wal-Mart’s share grows, the only question is
whether Wal-Mart will oust its vendors and go it alone. Independent
gas suppliers are growing as the oil giants spin off their
refineries, which makes that kind of a move plausible, and the sheer
number of Wal-Mart locations makes it an appealing partner. Says
retail analyst Kurt Barnard, “The volume they could offer would be
of enormous interest to refineries.”

Wal-Mart may lead the apparel market, but it does so with the sale
of mundane items like underwear, socks and sweatshirts. Analysts say
that Wal-Mart is losing sales of fashion items to companies like
J.C. Penney (JCP, news, msgs), Kohl’s (KSS, news, msgs) and Target
(TGT, news, msgs), which has had particular success with its lines
from Isaac Mizrahi and Liz Lange. Wal-Mart is now gunning for a
hipper milieu with George, the No.1-selling British apparel brand
that Wal-Mart landed when it bought its parent, U.K. retail giant
Asda, in 1999. Wal-Mart also stocks the Mary-Kate and Ashley line,
licensed from the famed Olsen twins. Look for the retail giant to
start sprucing up its clothing displays and marketing these brands
more heavily as it reinvents its fashion sense.