Wal-Mart

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Wal-Mart Stores, Inc.
Type Discount department store/Public (NYSE: WMT)
Founded Rogers, Arkansas (1962)
Headquarters Flag of United States Bentonville, Arkansas, USA
Key people Sam Walton (1918–1992), Founder
H. Lee Scott, CEO
S. Robson Walton, Chairman
Tom Schowe, CFO
Industry Retail
Products Discount stores, grocery stores, and hypermarkets
Revenue US $344.992 billion (2007)[1]
Net income US $12.178 billion (2007)[1]
Employees 1.8 million (2006)[1]
Slogan Wal-Mart. Always Low Prices. Always./ Save More. Smile More. (U.S.)
WE SELL FOR LESS every day! (Canada)
Website www.walmart.com

Wal-Mart Stores, Inc. (NYSE: WMT) is an American public corporation, and is currently the world's largest retailer and the largest corporation.[2] It was founded by Sam Walton in 1962, incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the United States (US) and Mexico.[3] Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business,[4] and the largest toy seller in the United States, with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s.[5] As of March 8, 2007, revenue was $2.0 billion higher than the previous year's results, which is less than 1% growth.[6]

Internationally, Wal-Mart operates in Mexico as Walmex, in the United Kingdom (UK) as ASDA and in Japan as The Seiyu Co., Ltd.. Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-Mart's investments outside North America have produced mixed results. In 2006, Wal-Mart sold its retail operations in South Korea and Germany.[7]

Contents

[edit] History

Sam Walton's original Walton's Five and Dime, now the Wal-Mart Visitor's Center, Bentonville, Arkansas.
Sam Walton's original Walton's Five and Dime, now the Wal-Mart Visitor's Center, Bentonville, Arkansas.
Main article: History of Wal-Mart

Sam Walton's retailing career began when he accepted a job offer at a JCPenney store in Des Moines, Iowa on June 3, 1940 where he remained for 18 months. In 1945, he met with Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin. Butler Brothers offered him a Ben Franklin store in Newport, Arkansas.

Walton could not come to agreement on his lease renewal and could not find a new location in Newport; so he located a new variety store in Bentonville, Arkansas which he would open as another Ben Franklin franchise, but called "Walton's Five and Dime." Walton achieved higher sales volume by selling products with slightly smaller markups than most competitors.[8]

In 1962, Walton opened the first Wal-Mart store, Wal-Mart Discount City, in Rogers, Arkansas.[9] Within five years the company expanded to 24 stores across the state of Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.

The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969, and in 1970 opened its home office in Bentonville, Arkansas, and its first distribution center. There were now 38 stores operating with 1,500 employees and sales of $44.2 million. The company began trading stock at this time as a publicly held company on October 1, 1972, and was listed on the New York Stock Exchange shortly thereafter. The first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma, and entered Tennessee in 1973, and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees, and total sales of $340.3 million.

Wal-Mart grew rapidly during the 1980s and 1990s.


[edit] Subsidiaries

See also: List of assets owned by Wal-Mart Stores, Inc.

Wal-Mart's operations are comprised primarily in three retailing subsidiaries: Wal-Mart Stores Division U.S., Sam's Club, and Wal-Mart International.[10] Wal-Mart does business under nine different retail formats: supercenters, food and drugs, general merchandise stores, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants.[10]

[edit] Wal-Mart Stores Division U.S.

An exterior of a typical Wal-Mart discount department store.
An exterior of a typical Wal-Mart discount department store.
An exterior of a typical Wal-Mart Supercenter in Madison Heights, Virginia, USA.  Unlike smaller Wal-Mart stores, most Wal-Mart Supercenters feature double entrances.
An exterior of a typical Wal-Mart Supercenter in Madison Heights, Virginia, USA. Unlike smaller Wal-Mart stores, most Wal-Mart Supercenters feature double entrances.
An exterior of a Wal-Mart Neighborhood Market in Winter Springs, Florida.
An exterior of a Wal-Mart Neighborhood Market in Winter Springs, Florida.
An exterior of a typical Sam's Club store in Maplewood, Missouri, a suburb of the St. Louis area.
An exterior of a typical Sam's Club store in Maplewood, Missouri, a suburb of the St. Louis area.

Wal-Mart Stores Division U.S. is Wal-Mart's largest business subsidiary, accounting for 67.2% of fiscal 2006 net sales.[10] This segment consists of three traditional retail formats: discount stores, supercenters, and neighborhood markets, all of which are located in the United States, as well as Wal-Mart's online retailer, walmart.com. Additionally, in February 6, 2007, the company launched a "beta" version of their new movie download service, mediadownloads.walmart.com, which sells 3,000 films and television episodes from all major studios and television networks.[11]

Wal-Mart Stores operates retail department stores selling a range of non-grocery products, though emphasis is now focused on the supercenters, which include more grocery items.

[edit] Wal-Mart Discount Stores

Wal-Mart Discount Stores is a chain of discount department stores that range in size from 20,000 square feet (2,000 m²) to 224,000 square feet (21,000 m²) with an average size of approximately 102,000 square feet (9,500 m²).[10] They carry some general merchandise products and a selection of food items. Many of these stores also feature a garden center, a pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and a fast food outlet. Some also have Gasoline Stations.

The first Wal-Mart store opened in 1962 in Rogers, Arkansas, and has since been remodeled and expanded, becoming a 24-hour Wal-Mart Supercenter. A similar Wal-Mart concept, Discount City, opened in Rogers a year earlier, but all of these stores were later closed or converted into Discount Stores.

As of February 28, 2007, there were 1,075 Wal-Mart Discount Stores in the United States. The busiest Wal-Mart in the world is in Southaven, Mississippi.[12]

[edit] Wal-Mart Supercenter

Wal-Mart Supercenter is a chain of hypermarkets that range in size from 98,000 square feet (9,000 m²) to 261,000 square feet (24,000 m²) with an average size of approximately 187,000 square feet (17,000 m²).[10] They carry everything a Wal-Mart Discount Store does, as well as a full-line supermarket (including meat and poultry, baked goods, delicatessen, frozen foods, dairy products, garden produce and fresh seafood). Many Wal-Mart Supercenters also feature a garden center, a pet shop, a pharmacy, a Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops such as a cellular phone store, hair and nail salons, a video rental store, a family fun center, a branch of a local bank, and possibly a fast food outlet. Some locations also sell gasoline, either through Murphy Oil Corporation, whose Wal-Mart stations are branded as "Murphy USA", Sunoco, Inc. as "Optima", or Tesoro Corporation, who uses the "Mirastar" banner on theirs.

The first Supercenter opened in 1988 in Washington, Missouri; a similar Wal-Mart concept, Hypermart USA, opened in Garland, Texas a year earlier, but all of those stores were later closed or converted into Supercenters. As of February 28, 2007, there were 2,256 Wal-Mart Supercenters in the United States.[12]

[edit] Wal-Mart Neighborhood Market

Wal-Mart Neighborhood Market is a chain of grocery stores that average about 42,000 square feet (3,900 m²).[10] They offer a variety of products (including a full-line of groceries, pharmaceuticals, health and beauty aids, photo developing services, and a limited selection of general merchandise).

The first Neighborhood Market opened in 1998 in Bentonville, Arkansas. As of February 28, 2007, there were 113 Neighborhood Markets in the United States.[12]

[edit] Sam's Club

Main article: Sam's Club

Wal-Mart operates Sam's Club, a chain of warehouse clubs that sells groceries and general merchandise, often in large quantities or volume. Sam's Club stores are only open to customers who subscribe to a paid, annual membership. Some locations also sell gasoline. The first Sam's Club opened in 1983 in Midwest City, Oklahoma.

According to Wal-Mart's 2006 Annual Report, Sam's Club accounted for approximately 12.7% of fiscal 2006 sales. Competitors of Wal-Mart's Sam's Club division are Costco, and the smaller BJ's Wholesale Club chain operating mainly in the eastern US.

As of February 28, 2007, there were 579 Sam's Clubs in the United States.[12]


[edit] Wal-Mart International

The operations of Wal-Mart International comprise 2,701 stores in 14 countries outside the United States.[13] According to Wal-Mart's 2006 Annual Report, International accounted for approximately 20.1% of fiscal 2006 sales.[10] Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico and the United Kingdom (UK).

Wal-Mart has operated in Canada since their acquisition of the Woolco division of Woolworth Canada, Inc.[14] Today, they operate 278 locations employing 70,000 Canadians, with a local home office in Mississauga, Ontario. On November 8, 2006, Wal-Mart Canada's first three Supercentres opened in Ancaster, London, and Stouffville, Ontario. As of January 31, 2007, there were six Wal-Mart Supercenters in Canada.[12] As of November 30, 2006, there were six Sam's Clubs Canada (all in Ontario: London, Richmond Hill, Vaughan, Cambridge, Pickering, and Toronto).[12] In December 2006, conversion of a Wal-Mart Discount Store into a Wal-Mart Supercentre has begun in Lethbridge, Alberta, making it the 7th in Canada and the first in Western Canada.

Sales in the fiscal year 2006 for Wal-Mart's UK subsidiary, ASDA, were 42.7% of the International segment sales. In contrast to Wal-Mart's US operations, ASDA was originally and remains primarily a grocery chain, but it has a stronger focus on non-foods than most UK supermarket chains (a notable exception is Tesco, UK's largest grocery & Non-food retailer). At the end of fiscal year 2006, there were 236 ASDA stores, 10 George stores, 5 ASDA Living and 43 ASDA small stores.

Wal-Mart's UK equivalent, "ASDA"
Wal-Mart's UK equivalent, "ASDA"

In addition to its wholly owned international operations, Wal-Mart has joint ventures in China and several majority owned subsidiaries. Wal-Mart's majority owned subsidiary in Mexico is Walmex. In Japan, Wal-Mart owns approximately 53% of The Seiyu Co., Ltd.[7] Additionally, Wal-Mart owns 51% of the Central American Retail Holding Company (CARHCO) formed from more than 360 supermarkets and other store formats, operating in 5 Central American countries: Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica.[15]

In 2004, Wal-Mart bought the Bompreço supermarket chain, comprised of 116 stores. Bompreço is the major supermarket chain in Northeastern Brazil. In late 2005, Wal-Mart took control of the Brazilian operations of Sonae Distribution Group through its new subsidiary, WMS Supermercados do Brasil, thus acquiring control of the Nacional and Mercadorama supermarket chains, the leaders in Rio Grande do Sul and Paraná states. None of those operations were rebranded. As of August 2006, Wal-Mart operates 71 Bompreço stores, 27 Hiper-Bompreço stores, 15 Balaio stores and 3 Hiper-Magazines (all originally part of Bompreço). It also runs 19 Wal-Mart Supercenters, 13 Sam's Club stores and 2 Todo Dia stores. With the acquisition of Bompreço and Sonae, Wal-Mart is currently the third largest supermarket chain in Brazil, behind Carrefour and Pão de Açúcar.

In July 2006, Wal-Mart announced its withdrawal of operations from Germany because of sustained losses in the highly-competitive German market. The stores were sold to the German company METRO AG.[16] The sale was completed in Wal-Mart's fiscal third quarter.[7]

In November 2006, Wal-Mart announced a joint venture with Bharti Enterprises to open "hundreds" of retail stores in India. Since foreign corporations are not allowed to enter the retail sector in India directly, Wal-Mart is expected to operate through franchises and handle the wholesale end of the venture.[17] The partnership will involve two joint ventures. While Bharti would be managing the front-end that involves opening retail outlets, Wal-Mart would take care of the back-end such as cold chains and logistics.

On February 21, 2007 Wal-Mart Argentina opened Changomas in La Rioja, Argentina. Changomas is a discount format that will be positioned as the price leader in the market and measures nearly 70,000 square feet including 48,000 square feet of selling space.

[edit] Corporate affairs

Wal-Mart's business model is based on selling a wide variety of general merchandise and marketing, at "always low prices."[10] The company refers to its employees as "associates." All Wal-Mart stores in the US and Canada also have designated "greeters", whose general role is to welcome shoppers at the store entrance, and play a role in loss prevention.[18]

Unlike many other retailers, Wal-Mart does not charge a slotting fee to suppliers for their products to appear on the store.[19] Alternatively, they focus on selling more popular products and often pressure store managers to drop unpopular products in favor of more popular ones, as well as manufacturers to supply more popular products.[19]

On September 14, 2006, the company announced that it would be phasing out its layaway program, citing declining use and increased costs.[20] Layaway was offered until November 19, 2006, with merchandise pickup by December 8, 2006. They plan to focus on alternative payment options, such as increased use of 6 and 12 month zero interest financing.

[edit] Advertising Campaigns

Wal-Mart previously used a widespread advertising campaign dubbed "ROLLBACK," which featured its trademark smiley-face icon dancing around on various price labels in the stores and "rolling back" prices. This advertising run was used primarily from 1997-2002. Starting in early 2002, Wal-Mart's ads focused more on traditional family values, showing happy families getting their products and needs met at Wal-Mart, and interacting with friendly Wal-Mart greeters and associates.

In December of 2006, Wal-Mart re-introduced its Christmas shopping ads, contrasting with its earlier "Happy Holidays" shopping campaigns. This pleased many Christians and shoppers in the South who prefer stores saying outright that the December shopping season is primarily for Christmas. It also drew the ire of many peope of other faiths, saying that Wal-Mart should maintain its "neutrality" and respect for all holidays.

[edit] Financials

According to -----listings[2], in 2006 Wal-Mart ranked at number 67 of the 100 largest corporations in terms of profitability (profits divided by total revenue), behind retailers Home Depot, Dell and Target, and ahead of Costco and Kroger. For the fiscal year ending January 31, 2006, Wal-Mart reported net income of $12.178 billion on $344.992 billion of sales revenue (3.5% profit margin).[21] As of March 8, 2007, revenue was $2.0 billion higher than the previous year's results.[6] For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for approximately 20.1% of total sales.[10]

[edit] Governance

Wal-Mart is governed by a thirteen-member Board of Directors, which is elected annually by shareholders. S. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board, and H. Lee Scott, the Chief Executive Officer, serves on the board as well. Other members of the board include Aida M. Alvarez, James W. Breyer, M. Michele Burns, James I. Cash, Jr., Douglas N. Daft, David D. Glass, Roland A. Hernandez, Jack C. Shewmaker, Jim C. Walton, Christopher J. Williams, and Linda S. Wolf.

Notable former members of the board include Hillary Clinton (1985-1992)[22] and Tom Coughlin (2003-2004), who also served as Vice Chairman. Clinton left the board prior to the 1992 U.S. Presidential Election, and Coughlin left the board in December, 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart.[23] On August 11, 2006, he was sentenced to 27 months of home confinement, five years of probation, and ordered to pay $411,000 in restitution.[24]

[edit] Competition

In the United States, Wal-Mart's chief competitors in low-end general merchandise include Sears Holdings Corporation's Kmart chain and Target. Many smaller regional chains, such as Meijer in the midwest, are also competitors. Wal-Mart's move into the grocery business has also positioned it against major grocery chains such as H-E-B, Kroger, Albertson's, Publix, Giant Eagle, Safeway, Winn-Dixie, Ahold, Wegmans, P & C, Price Chopper and many other regional chains and independents. A niche has been carved out of Wal-Mart's dominance in the US by several retail corporations.[25] By focusing on a small number of low-cost products, dollar store retailers such as Family Dollar and Dollar General have successfully competed head-to-head with Wal-Mart for home consumer sales. In 2004, Wal-Mart responded by testing their own dollar store concept, a subsection of some stores known as "Pennies-n-Cents."[26]

In Canada, Wal-Mart competes with the Hudson Bay Company's low-cost department store Zellers, which is the second largest chain of discount department stores in Canada after Wal-Mart. Wal-Mart also competes with Canadian department stores Sears Canada, Winners, Giant Tiger, Canadian Tire and various other regional chains. For grocery in Canada, Wal-Mart competes with Safeway, Sobeys, Loblaw Companies which operates under various names such as Loblaws, No Frills, Zehrs Markets, Real Canadian Superstore, Fortinos and various other Canadian grocery store chains.

Wal-Mart has struggled in other foreign markets. For example, in Germany, it had captured just 2% of German food sales following its entry into the market in 1997 and had remained "a secondary player" compared to competitor Aldi which boasts 19% share of the German market.[27] In July 2006, Wal-Mart announced its withdrawal of operations from Germany because of sustained losses. Its stores are to be sold to German company METRO AG[16] In China, Wal-Mart is "a small fish" as its strategy of "everyday low prices" has not been successful against "Chinese mom-and-pop shops that are used to cutthroat pricing."[28] In May 2006, Wal-Mart withdrew from the South Korean market when it agreed to sell all 16 of its South Korean outlets to Shinsegae, a local retailer, for $882 million who are as of late 2006 re-branding the country's Wal-Marts as E-mart. Wal-Mart had originally entered the South Korea market in 1998.[29] In the UK, Wal-Mart's ASDA subsidiary is the second largest chain after Tesco.[30] Specifically, ASDA is a distant second to Tesco in the UK grocery market, and as of 2006 the gap is widening, based on market share figures published by TNS Superpanel.

[edit] Customer base

Wal-Mart customers place low prices as the most important reason for shopping at Wal-Mart, reflecting a "Low prices, always" message that Wal-Mart had had from 1962 until 2006.[31] In the US, Wal-Mart customer's average incomes are below the national average. Analysts have estimated that more than one-fifth of Wal-Mart's US customers have no bank accounts, twice the national rate.[32] Financial results in 2006 have indicated Wal-Mart customers are sensitive to higher utility costs and gas prices.[33]

Wal-Mart has recently made steps to expand its US customer base. On September 7, 2006, the Wall Street Journal reported that Wal-Mart was modifying its US stores from a one-size-fits-all merchandising strategy to a custom-fitting merchandise assortment designed to "reflect each of six demographic groups — African-Americans, the affluent, empty-nesters, Hispanics, suburbanites and rural residents."[34] About six months later, Wal-Mart went public with a variation on their customer profile. The new message: "Saving people money so they can live better lives."[31] This reflects what Wal-Mart identifies as three groups that its 200 million customers are organized into:[31]

  • "brand aspirationals" (people with low incomes who are obsessed with names like KitchenAid);
  • "price-sensitive affluents" (wealthier shoppers who love deals); and
  • "value-price shoppers" (who like low prices and cannot afford much more).

A more-specific example of the company's efforts to broaden its US customer base include a focus on gay and lesbian customers, including a December 2005 internal seminar and the August 2006 joining of the corporate advisory council of the National Gay and Lesbian Chamber of Commerce in what is described as a "pragmatic" effort "to broaden its appeal as it tries to expand into new territories, particularly in the more liberal and union-friendly urban and coastal regions". Wal-Mart rejected the American Family Association's recommendations by carrying the movie "Brokeback Mountain", a love story about two gay cowboys in Wyoming.[35][36]

It has been reported that 80% of US residents shop at Wal-Mart at least once a year.[37] Each week, 100 million customers visit Wal-Mart's US stores - "more than one-third of the US population."[38]

Polling data reported by John Zogby suggests there is a correlation between how often consumers shop at Wal-Mart and how conservative they are. In the 2004 US Presidential election 76% of voters who shopped at Wal-Mart once a week voted for George W. Bush while only 23% voted for John Kerry. By contrast 80% of voters who never shopped there voted for Kerry with 18% voting for Bush. African American and Hispanic voters who shop there are described as "significantly more conservative" than their non Wal-Mart shopping peers. When measured against other similar retailers in the US, frequent Wal-Mart shoppers were rated the most politically conservative.[39] This also roughly correlates with the geographic distribution of Wal-Mart stores: most of them are in rural areas, whose residents tend to be more conservative than suburban residents.[citation needed]

[edit] Private label brands

Wal-Mart's private label store brands include: Great Value, Equate, and Sam's Choice. In a 2006 study, The Hartman Group marketing research firm issued a report that found that, "While clearly other results in this study point to the success of other retailers, we are struck by the magnitude of mind-share Wal-Mart appears to hold in shoppers' minds when it comes to awareness of private label brands and retailers."[40]

[edit] Diversity

For equal opportunities for women, in 1999 Wal-Mart ranked well below its retailing peers, which had an average of 39% female managers (a 21% difference from the ratio of women in the workforce, which is 60%), according to data from the Equal Employment Opportunity Commission. Female employees make up 72% of Wal-Mart's workforce, but only 30% of its management (a 15% difference from the population ratio, 4% higher than the rest of the industry). This ratio was typical in 1975.[41][42]

Wal-Mart has received improving scores on the Corporate Equality Index, a measure of how companies treat homosexual employees and consumers, published by the Human Rights Campaign. The rating was 65% in the 2006 edition,[43] 57% in 2005, 43% in 2003 and 2004, and 14% in 2002.[44][45] Wal-Mart's 2003 score accompanied an expanded antidiscrimination policy to protect gay and lesbian employees,[46] The 2005 score accompanied a new definition of family that included same-sex partners.[47]

In January 2006, Wal-Mart announced that "diversity efforts include new groups of minority, female and gay employees that have started meeting at Wal-Mart headquarters in Bentonville to advise the company on marketing and internal promotion. There are seven so-called Business Resource Groups: women, African-Americans, Hispanics, Asians, Native Americans, Gays and Lesbians, and a disabled group."[48]

[edit] Criticism of Wal-Mart

Bumper sticker critical of Wal-Mart.
Bumper sticker critical of Wal-Mart.
Main article: Criticism of Wal-Mart

Wal-Mart has been criticized and sued by many community groups, grassroots organizations, trade unions,[49] and environmental groups, for its extensive foreign product sourcing, aggressive and almost monopolycal distribution policies, treatment of employees and product suppliers, environmental policies, use of public subsidies, and store impacts on local communities and businesses, and other issues. Wal-Mart has been accused of unlawful activity, including predatory pricing, enforcing a policy of greed, discrimination and violation of labor laws.

[edit] Local communities

When planning new store locations, Wal-Mart sometimes faces concerns from the affected communities. People who oppose new Wal-Mart stores in their area cite concerns like traffic problems, environment problems, public safety, absentee landlordism, poor public relations,[50][51] low wages and benefits, and predatory pricing.[52][53][54] Those who defend Wal-Mart cite consumer choice and economic benefits.[55]

Dozens of communities have attempted to implement size caps on big box stores[56] in recent years to keep Wal-Mart, Target, Home Depot and other large chain stores out.

Some residents of the city of Austin have recently protested the re-development of Northcross Mall into the largest Wal-Mart in Texas. Their concerns include an increase in traffic due to it being open 24 hours a day, its unattractiveness, light and noise pollution, etc. The group, Responsible Growth for Northcross, has been a vocal opponent of the development.

[edit] Use of foreign labor

In the US, one criticism derives from claims that Wal-Mart uses cheap, foreign labor to provide its customers with lower prices. According to the AFL-CIO, "Wal-Mart is the single largest importer of foreign-produced goods in the United States", their biggest trading partner is China, and their trade with China alone constitutes approximately 10% of the total US trade deficit with China as of 2004. As of 2004, 60% of products sold at Wal-Mart were imported to the US from other countries.[57]

[edit] Health care and employee benefits

Another US-specific criticism concerns Wal-Mart's health insurance. According to an October 2005 article in BusinessWeek, Wal-Mart's health insurance covers 44% or approximately 572,000 of its 1.3 million US workers.[58] In comparison, Wal-Mart rival Target insures approximately the same percentage of workers. Further, Wal-Mart spends an average of $3,500 per employee for health care, 27% less than the retail-industry average of $4,800.[59] Wal-Mart CEO Lee Scott acknowledged benefits could improve by claiming Wal-Mart employees can get better value from taxpayer funded health care than from Wal-Mart's own health plans, "In some of our states, the public program may actually be a better value, with relatively high income limits to qualify, and low premiums."[60] On April 17, 2006, Wal-Mart announced that it was making a health care plan available to part-time workers after one year of service, instead of the prior two year requirement, and extending the coverage to include children.[61] The company estimates that this new change could add 150,000 workers to health coverage plans, if all eligible choose to take part.[61] But the new plan provides a benefit only after a $1,000 deductible is paid ($6,000 for a family), and so many workers may be unable to afford the coverage and will opt not to participate in the plan.[61]

The State of Maryland passed a controversial bill in January 2006 requiring all corporations with more than 10,000 employees in the state to spend at least 8% of their payroll on employee benefits, or pay into a state fund for the uninsured. Wal-Mart, with about 17,000 employees in Maryland, was the only known company to not meet this requirement before the bill passed.[62] On July 7, 2006, the Maryland law was overturned in federal court by U.S. District Judge Frederick Motz who ruled that the law would "hurt Wal-Mart by imposing the administrative burden of tracking benefits in Maryland differently than in other states."[63]

On March 22, 2007 Wal-Mart announced that it is taking new initiatives to recognize employee performance and service by having Associate Celebration Day. It awarded $529.8 million in bonuses to 813,759 hourly associates. [64]

[edit] Employee and labor relations

Wal-Mart has been criticized and sued for its policy against labor unions. In Central America, it has largely thwarted unionization through union tactics such as secreterial surveillance and pre-emptive closures of stores or departments who choose to unionize.[65] Wal-Mart's anti-union policy is also used in Canada and several other countries. For example, when workers at a Jonquière, Quebec Wal-Mart voted to unionize, Wal-Mart closed the store five months later, citing weak profits.[66][67][27] In countries that require unions or the option to join a union, such as Germany and China, Wal-Mart allows them.[30]

Wal-Mart's lax work regulations and managers practices have repeatedly invoked criticism in some foreign countries.[citation needed] For instance, a German court ruled in 2005 that Wal-Mart's policy of allowing dating relationships and strong flirting among coworkers is for German law and therefore does not apply to the company's German stores.[68] The same court also ruled that Wal-Mart's efforts to set up a telephone hotline enabling fellow employees to report violations of these restrictions are illegal under German labor legislation.[69]

In August 2006, Wal-Mart announced that it would allow workers at all of its Chinese stores to become members of trade unions. It said it would work with the state-sanctioned All-China Federation of Trade Unions (ACFTU) on representation for its 28,000 staff.[70][71]

In August 2006, Wal-mart announced that it would roll out an average pay increase of 6% for all new hires at 1,200 US Wal-Mart and Sam's Club locations, and at the same time would institute pay caps on veteran workers.[72] While Wal-Mart claims the measures are necessary to stay competitive, critics claim the salary caps are primarily an effort to push higher-paid, veteran workers out of the company.[citation needed]

Wal-Mart's United Kingdom subsidiary, ASDA, was voted a Top 10 UK employer by the UK newspaper Sunday Times Top 100 Best Employers Survey in 2003, 2004 and 2005.[73] Wal-Mart Canada has rated by Report on Business Magazine as one of "50 Best Employers in Canada". The listing is compiled by Hewitt Associated based primarily on anonymous employee surveys.[74]

Wal-Mart is currently facing several employee-related lawsuits, including a gender discrimination lawsuit, Dukes v. Wal-Mart, alleging female employees were discriminated against in pay and promotions. On February 2007, the United States Court of Appeals for the Ninth Circuit issued a 2-1 ruling that affirmed a lower court ruling to certify the case as a class-action lawsuit that plaintiffs estimate could include approximately 1.6 million women.[75][76] That would make it the largest class-action lawsuit in US history.

Over the Christmas of 2006, Wal-Mart instituted a profit sharing program for all associates called "My$hare". The bonus is proportional to the profits earned over the preceding three months. Wal-Mart plans to issue the bonus every three months for the foreseeable future. In March 2007, the first of these benefits were paid out to associates in the form of an addition to the regularly bi-weekly paycheck for hourly employees.

[edit] References

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[edit] Further reading

  • Bergdahl, Michael (2004). What I Learned from Sam Walton: How to Compete and Thrive in a Wal-Mart World. ISBN 0-471-67998-4. 
  • Bianco, Anthony (2006). The Bully of Bentonville: How the High Cost of Wal-Mart's Everyday Low Prices Is Hurting America. ISBN 0-385-51356-9. 
  • Dicker, John (2005). The United States of Wal-Mart. Jeremy P. Tarcher. ISBN 1-58542-422-6. 
  • Ehrenreich, Barbara (2002). Nickel and Dimed: On (Not) Getting By in America. Owl Books. ISBN 0-7453-1846-0. 
  • Featherstone, Liza (2004). Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart. Basic Books. ISBN 0-465-02316-9. 
  • Fishman, Charles (2005). The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy. Penguin Press. ISBN 1-59420-076-9. 
  • Joseph, Marc & Fischer, Rusty (2005). The Secrets of Retailing, or: How to Beat Wal-Mart!. Silverback Books. ISBN 1-59637-037-8. 
  • Lichtenstein, Nelson (2006). Wal-Mart: A Field Guide to America's Largest Company and the World's Largest Employer. New Press. ISBN 1-59558-035-2. 
  • Mitchell, Stacy (2006). Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America's Independent Businesses. Beacon Press. ISBN 0-8070-3500-9. 
  • Ortega, Bob (1998). In Sam We Trust: The Untold Story of Sam Walton and Wal-Mart, the World's Most Powerful Retailer. ISBN 0-8129-6377-6. 
  • Peacock, Joe (2005). Mentally Incontinent: A Joe The Peacock Book, The Wal-Mart Story. ISBN 0-9774184-0-5. 
  • Porter, David and Mirsky, Chester L. (2003). Megamall on the Hudson: Planning, Wal-Mart, and Grassroots Resistance. Trafford. ISBN 1-55369-855-X. 
  • Quinn, Bill (2005). How Wal-Mart Is Destroying America and the World: And What You Can Do about It (3rd edition). Ten Speed Press. ISBN 1-58008-668-3. 
  • Slater, Robert (2003). The Wal-Mart Decade: How a New Generation of Leaders Turned Sam Walton's Legacy into the World's #1 Company. ISBN 1-59184-006-6. 
  • Slater, Robert (2004). The Wal-Mart Triumph: Inside the World's #1 Company. ISBN 1-59184-043-0. 
  • Soderquist, Don (2005). The Wal-Mart Way: The Inside Story of the Success of the World's Largest Company. ISBN 0-7852-6119-2. 
  • Spotts, Greg (2005). Wal-Mart: The High Cost of Low Price. Disinformation Company. ISBN 1-932857-24-9. 
  • Westerman, Paul (2000). Data Warehousing: Using the Wal-Mart Model. ISBN 1-55860-684-X. 
  • Zook, Matthew, and Graham, Mark (2006). Wal-Mart Nation: Mapping the Reach of a Retail Colossus In Wal-Mart World (15-25). Routledge. ISBN 0-415-95137-2. 

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