Monday, May 14, 2007

Wal-Mart's offer to downsize Northcross store met with scorn by local opponents

Wal-Mart's offer to downsize Northcross store met with scorn by local opponents



Walmart has sent a letter to the city promising to bring the store size down to 186-thousand square feet from the original proposal of 219-thousand square feet. But further down in the letter it says if anyone files a lawsuit against their site plan, they may re-evaluate that decision. Hope Morrison with "Responsible Growth for Northcross" says she reads that as a threat. The group held a press conference tody across the street from the site of the proposed new store. Morrison decried what she said was "strong-armed" tactics by Wal-Mart to "bully" local opposition. To view Wal-Mart's letter to the City of Austin, click HERE For the full audio of the press conference by "Responsible Growth for Northcross, click HERE

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Sunday, May 06, 2007

Would Sam Be Proud?

Executive Pay
Would Sam Be Proud?
Nathan Vardi 05.03.07, 6:00 PM ET

Things keep going wrong for H. Lee Scott Jr. and Wal-Mart Stores. The world's biggest retailer has been floundering since he took over seven years ago. The company's shares have returned -3.4% annually, compared with the 1.5% annual gain for the S&P 500 during Scott's tenure. But the man in charge is still being paid well, earning $60 million this decade and averaging $8.5 million a year.

Scott, 58, is only the second man to head Wal-Mart since founder Sam Walton left a legacy of annual double-digit growth. But for Scott, posting surging financials at a company with $345 billion of sales has proved challenging. Earnings have slowed, rising only 8% annually over the last two years. Last November, same-store sales growth turned negative for the first month in a decade.

Trying to find his way, Scott has emphasized everything from organic apples to trendy crochet sweaters. He admitted in October that hocking upscale products at the discount retailer had "moved too far too fast," adding it was time to go back to "fashion basics." Scott has also been focusing on international expansion, especially in places like Mexico and China. Still, Wal-Mart had to exit its foreign adventure in Germany last year, resulting in an $863 million loss, and Japanese and U.K. operations are struggling.

On the home front, Wal-Mart continues to be publicly assaulted by unions, trial lawyers, local community groups and just about anybody else with an ax to grind. Scott's battle for American hearts and minds was not helped by former Atlanta Mayor Andrew Young, whom Wal-Mart hired to help improve its public image. Young resigned after giving a newspaper interview in which he reportedly said ethnic shopkeepers were selling spoiled food to inner city blacks. The company recently had to fire an employee who worked for its Threat Research and Assessment Group, set up to look for pro-union sentiment in its ranks. Acting on his own and with unclear motivations, the employee had been secretly recording conversations between Wal-Mart media relations staff and a journalist.

Still, Wal-Mart defends Scott's paycheck and his performance. Wal-Mart points to the fact that last year alone sales increased $37 billion and income from continuing operations increased by $770 million. The company claims Scott's compensation is benchmarked with the CEOs of other publicly traded U.S. retailers and large companies, adding that its boss gets paid one of the lowest salaries as a percentage of annual revenue and net income.

"Lee Scott leads the largest and most complex company in the world and has delivered strong financial performance," says John Simley, a Wal-Mart spokesman. "More than 85% of our CEO's compensation, as set by an independent board committee, is tied to the company's financial performance."

Indeed, Wal-Mart's board has kept finding ways to reward Scott, who was born in Baxter Springs, Kan., and joined Wal-Mart in 1979. In 2006, for example, the board saw fit to grant Scott $4.4 million in a long-term incentive payout. For the last four years, Scott's annual pat-on-back bonus has added up to $16.6 million.

© 2007 Inc.™ All Rights Reserved

Saturday, May 05, 2007

Wal Mart loses bid to take union fight to Supreme Court of Canada

Wal Mart loses bid to take union fight to Supreme Court of Canada
Published: Thursday, May 3, 2007 2:24 PM ET
Canadian Press

OTTAWA (CP) - The Supreme Court of Canada has refused to hear an appeal by Wal Mart over the fight to unionize its store in Gatineau, Que.,

As is usual in leave-to-appeal cases, the court gave no reasons for its decision. The world's largest retailer wanted the courts to force the Quebec labour relations board to order a secret ballot by the store's employees. The Quebec Court of Appeal rejected the case earlier.

The labour board had ordered the certification of one United Food and Commercial Workers local after between 35 and 50 per cent of workers signed union cards.

The local withdrew its union request in May 2005, but another local submitted its request for accreditation the following day.

The labour board cancelled a union vote because the original local had withdrawn its request.

Wal-Mart challenged that decision, saying it should have been allowed to present arguments on the legality of the withdrawal.

© The Canadian Press, 2007

Copyright © CBC 2007

Friday, May 04, 2007

Can Your Company Compete Against Wal-Mart?

Can Your Company Compete Against Wal-Mart?
It can if you use the POCKETS strategies.
By Adrienne Selko

May 2, 2007 -- Think Wal-Mart is just a retailer? Think again. Wal-Mart is a manufacturing, IT, logistics and distribution driven company that also has retail stores. In other words, it's a supply-chain driven company says Michael Bergdahl, a former Wal-Mart director who worked directly under Sam Walton. The influence of Sam Walton and the world's largest retailer cannot be underestimated says Bergdahl but companies can successfully compete against it.

In his new book, What I Learned From Sam Walton: How To Compete and Thrive in a Wal-Mart Word, Bergdahl lays out strategies on: pricing, operations, culture, key product, expenses, talent and service (POCKETS).

"Manufacturers need to realign their game plan. Customers are in charge and shelf space is not guaranteed. Private label products will happily move onto the shelf if yours isn't available," explains Bergdahl. This is true for many retailers, not just Wal-Mart, and is especially true in Europe where private label products make up 40% of the retail market.

That puts the supply chain front and central to a manufacturer's profitability. Wal-Mart has honed the hub-and-spoke distribution strategy which provides one of its key operational competitive advantages, explains Bergdahl. While Wal-Mart needs only 10% of its stores square footage for inventory, competitors need 25%. That's because each store is within a day's drive of a distribution center.

In the book, Bergdahl quotes Jay Fitzsimmons, a Wal-Mart senior vice president and treasurer as saying that "we're in the distribution business. It's Wal-Mart's job to bring a product from the dock to the customer's trunk in as little as 72 hours."

One way that Wal-Mart brings in products so quickly is their unique relationship with vendor partners. Other companies can replicate this model and in fact Bergdahl suggests that companies take advantage of professional trade associations to create teams of local companies. And use the organization as a platform to share best practices advises Bergdahl. That's what the largest companies do -- they benchmark best practices against each other. GE, P&G, FedEx, Home Depot all share ideas.

Manufacturing products that customers want and backing that up with great service is how you can compete against Wal-Mart says Bergdahl. "Manufacturers want to be all things to all people and they end up offering the same products in all markets. That just doesn't work today. The products must be tailored to local needs." Micro marketing is key says Bergdahl.

"Differentiating products is how manufacturers will succeed today," says Bergdahl. Companies must hold onto their brands for that is their true value in the marketplace. "Manufacturers have to realize that they are in the business of branding and not manufacturing as we thought of it in the past. In some cases that means managing the brand and outsourcing the actual manufacturing process."

Another area of success for Wal-Mart is its ability to control its expenses. "Wal-Mart has changed the traditional standards of expense control, evolving, or morphing them to a previously unheard-of level, disproving the notion that you can't save your way to prosperity," says Bergdahl.

Cost control at Wal-Mart's is sort of like an extreme sport says Bergdahl. He tells a story in the book about Lee Scott, current CEO of Wal-Mart, sharing a hotel room at Days Inn with the CFO to save money. To ward against excess spending in a company as large as Wal-Mart each employee acts as if they were responsible for paying the company's bills at the end of the month explains Bergdahl. The company's profit-sharing plan seems to be the driving force behind employee frugality.

Cost savings are huge in Wal-Mart's distribution and logistic functions as it employs a method called cross-docking. Products are received on one side of the warehouse and leave out of the other side, virtually eliminating the storage of goods. A form of just-in-time distribution, merchandise flows through the distribution center to the customer in the shortest time possible. Using company owned fleet and tractors Wal-Mart replenishes its own stores 24 hours per day from its own distribution centers. Using technology like RFID and VSAT systems (Very Small Aperture Terminal) velocity of products is greatly increased and inventory turns are quite high.

"The key to competing and surviving against Wal-Mart is to focus your business into a niche or pocket where you can leverage your strengths in the local marketplace," says Bergdahl. Using Sam Walton's own rules for building a business, companies can compete. Bergdahl summarized these rules:

Commit to and communicate a clear business strategy.

Take care of your people.

Control costs.

Take care of your customer

It can if you use the POCKETS strategies.Take calculated risk to set your business apart.

Michael Bergdahl is a former director of Wal-Mart. He has also worked with Frito-Lay and American Eagle Outfitters. He has been involved with two successful business turnarounds. For information on his book and speaking schedule visit

Copyright© 1998-2007 Penton Media, Inc. All rights reserved.

Lead found in baby bibs sold at Wal-Mart

Lead found in baby bibs sold at Wal-Mart
(Original publication: May 2, 2007)

Vinyl baby bibs sold at Wal-Mart, including the chain's stores in New York, have been found to contain lead that could be dangerous if they deteriorate and children swallow pieces of the vinyl.

The Consumer Product Safety Commission issued a warning today telling parents to stop using bibs that are cracked or peeling. The agency said that "none of the bibs that were tested at CPSC's laboratory would pose a risk of substantial illness to children from mouthing. However, if the condition of a vinyl bib deteriorates to the point that a baby could pull or bite off and swallow a piece of vinyl containing lead, then the amounts of lead consumed could approach levels of concern."

The agency said it tested the bibs based in part on information provided by New York Attorney General Andrew Cuomo's office.

The bibs in question were sold under the name "Baby Connection" and come in packages of two or seven. Some of the bibs have Sesame Street characters.

According to Cuomo's office, the highest levels of lead were found in bibs with a tag sewn into the lining that have these numbers: 1468102732, 14681527 and 1468151077.

Wal-Mart has agreed to stop selling the bibs in New York, Illinois and California, according to Cuomo's office.

More information at:

Copyright © 2007 The Journal News, a Gannett Co. Inc. newspaper serving Westchester, Rockland and
Putnam Counties in New York.

Tuesday, May 01, 2007

Wal-mart: The Low Tax Leader, Always

Wal-mart: The Low Tax Leader, Always
The Capital Times :: BUSINESS :: A10
Tuesday, April 24, 2007
Mike Ivey

The next time you make the not-so-scenic drive on U.S. 151 past the giant new Wal-Mart warehouse near Beaver Dam, keep this in mind: Wisconsin's largest employer draws more in corporate welfare than it pays in state taxes.

Not that this comes as any great surprise. Stories about the evil doings of the nation's largest corporations are greeted largely with yawns these days.

But according to a report from the Milwaukee-based Institute for Wisconsin's Future that somehow fell through the cracks on Tax Day, Wal-Mart has used a variety of completely legal tax avoidance schemes to cut millions from its state tax bill.

Using public records, the group determined that Wal-Mart pocketed $852 million in net profits in Wisconsin off value-hungry consumers between 2000 and 2003.

Over that same period, Wal-Mart paid only $3 million in corporate income tax here. That's a tax rate of 0.35 percent, a fraction of the 7.9 percent rate corporations doing business in our fair state are supposed to pay.

Pardon my West High math, but if Wal-Mart paid the going tax rate here it would have owed closer to $67 million.

At the same time, Wal-Mart has been feeding at the public trough like nobody else in state history. The Arkansas-based retailer has benefited from more than $20 million in public economic benefits in Wisconsin, according to one national study. Good Jobs First reported in 2004 that Wal-Mart stores and distribution centers in Baraboo, Beaver Dam, Menomonie, Milwaukee and Tomah received at least $21.75 million in local tax subsidies.

The most egregious example, of course, is the Beaver Dam distribution center with a total subsidy of nearly $8 million. Of that, $4.2 million came via the Beaver Dam Area Development Corp., which negotiated with Wal-Mart behind closed doors.

The shady dealings led to three separate lawsuits, including one filed in 2004 by then state Attorney General Peg Lautenschlager. The AG accused the Beaver Dam Development Corp. of breaking the state's open meeting and public record laws.

A Marquette County judge did rule in favor of the corporation but the case has moved on through the appeals process and the plaintiffs hope the state Supreme Court will eventually rule on the matter.

One could argue that Wal-Mart is only doing its best to bring value to financially-strapped consumers. If the firm paid more in taxes, it would just raise the price on diapers and salty snacks, right?

But what's really galling is that Wal-Mart and its sister retailer Sam's Club are the first to wave the flag and talk about the American dream of owning your own business. Sam's Club even has the nerve to boast it's "in business for small business."

This from a corporation that uses every trick in the book to avoid paying its fair share.

Here's the latest Wal-Mart tax avoidance scheme, as reported in the Wall Street Journal in February 2007.

Apparently, Wal-Mart has aggressively used a "captive Real Estate Investment Trust" or REIT, which is based in Delaware. It owns the company real estate so it can, in effect, rent space back to itself to save on taxes.

A scheme like this would land a hard-working Wal-Mart shopper from McFarland or Sun Prairie some jail time for tax evasion. But for many corporations, working overtime to avoid taxes is just another day at the office.

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