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CORPORATISM -
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Wal-Mart stops smiling at critics

Posted in the database on Saturday, April 09th, 2005 @ 00:52:31 MST (1761 views)
by Mark Albright      

Untitled Document BENTONVILLE, Ark. - Wal-Mart has become the poster child for many of the ills confronting the American economy. Cheaper imports that undermine American manufacturing jobs. The growing reliance on low-paying American retail service jobs to support the middle class. Neighborhoods that fight tooth and nail to keep more traffic from overcrowded streets.

Lee Scott, chief executive of Wal-Mart Stores Inc., says he's tired of his company being the punching bag for critics trying to "hang on to a status quo that doesn't exist in America today."

"The thing is, innovation and competition tend to change the status quo. We were a small store once, too. We were able to innovate and use the economies of scale and volume buying to deliver the value our customers needed and wanted," he said. "If it weren't Wal-Mart, it would have been someone else. I can assure you that people who live paycheck to paycheck are thrilled when we come to town."

In short, anybody who thought Wal-Mart's new multimillion-dollar PR campaign to respond to its growing chorus of critics is going to be some charm offensive should think again.

Forget the whistling smiley face of Wal-Mart's price rollback ads. Scott's acerbic wit was the star attraction when the world's largest company kicked off its first two-day crash course in Wal-Mart 101 here Tuesday. About 70 reporters from Seattle to New York made the trip to hear Scott say he's not going to tolerate critics "telling lies about us."

Wal-Mart's pay and benefits are competitive with those of other retailers, he says. Otherwise, why would 5,000 to 8,000 people line up for 300 to 500 jobs at a new supercenter? Free trade and a global economy are doing in American manufacturing. Critics are picking on Wal-Mart because it's huge, but shoppers are voting with their wallets.

"I wouldn't be surprised if they go after Target and Dollar General next," he said of the company's critics. "The unions didn't object to us until we started putting supercenters in union markets."

The briefings are part of an escalating PR campaign being waged between Wal-Mart and its critics, who plan to begin advertising. A coalition of groups ranging from the AFL-CIO to antisprawl groups and the Sierra Club have joined forces in an attempt to stymie the chain's torrid growth.

The world's largest retailer, Wal-Mart plans to become an even more pervasive force. In its 43 years, the chain has grown far beyond its reputation as a death knell for small-town merchants. With the advent of Wal-Mart Supercenters, which combine a discount store with a supermarket, Wal-Mart quickly became the nation's largest grocer. For every new supercenter, two traditional supermarkets close.

Wal-Mart commands 19 percent of U.S. retail food sales, and its market share is forecast to hit 35 percent by 2007 as the chain adds 1,000 supercenters to its collection of 1,700, according to Retail Forward, a Columbus, Ohio, retail consultant. It's also the third-largest pharmacist, owns the nation's most popular pet food brand and runs the nation's largest truck fleet.

The Tampa Bay area, where Wal-Mart surged from nothing to third place among grocery retailers in five years, has become a hotbed of fierce zoning disputes as Wal-Mart seeks to open 11 supercenters within three years.

Unions have been fighting the chain for years, but the fight became more charged as Wal-Mart began moving into union stronghold markets in California, New York, Chicago and Colorado last year. The Teamsters, Service Employees Union International and the United Food and Commercial Workers are trying to force union elections, but with no success.

Wal-Mart regards organized labor as an anathema to its business model. So it has taken extraordinary steps to thwart the results of union elections.

"We recognize unions in Germany, where they are required by law," Scott said. "But we don't need them in the United States, where our employees know they can take problems to their manager."

When meat-cutters in a Texas store voted for a union, the company eliminated virtually all of the meat-cutter departments in supercenters. In California, a strike shut down three of the biggest supermarket chains last year because management demanded wage and benefit concessions to meet Wal-Mart's lower labor costs.

Indeed, the groups have plenty of ammunition. The company recently reached an out-of-court settlement on government charges that it hired contractors who used undocumented immigrants as janitors, then locked some of them inside stores at night to cut down on pilferage.

The company has been hit with the largest sexual discrimination class-action lawsuit in history.

Its salaries are so low and its health insurance priced so high many employees rely on government support from Medicaid for health care.

Meanwhile, several states and local governments have provided Wal-Mart with an estimated $1-billion in subsidies for the jobs provided by its distribution centers and, in a few cases, its stores.

Wal-Mart counters that 56 percent of its employees have company health insurance, while 30 percent rely on their spouses'. Its average hourly worker is paid $10 an hour, which is well above the retail industry average.

 



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