Wal-Mart
From Wikipedia, the free encyclopedia
| Wal-Mart Stores, Inc.
<tr><td colspan="2" style="text-align:center; padding:16px 0 16px 0;">Image:WalmartPNGlogo.PNG</td></tr> | |
| Type | Discount department store/Public (NYSE: WMT) |
|---|---|
| Founded | Rogers, Arkansas (1962) |
| Headquarters | Image:Flag of the United States.svg Bentonville, Arkansas, USA
<tr><th style="text-align:right; padding-right:0.75em;">Key people</th><td>Sam Walton (1918–1992), Founder |
Wal-Mart Stores, Inc. (NYSE: WMT) is an American public corporation. It was founded by Sam Walton in 1962, first incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest retailer in the world, and the second largest corporation (behind Exxon Mobil). These placings are based on revenue as of 2006.<ref name="2006-Fortune-Global500">Staff Writer. "Fortune Global 500." CNN/Fortune. July 24, 2006. Retrieved on July 25, 2006.</ref> For the fiscal year ending January 31, 2006, Wal-Mart reported net income of $11.2 billion on $316 billion of sales revenue (3.5% profit margin).<ref name="financial">"Wal-Mart Reports Record Fourth Quarter Sales and Earnings." Wal-Mart. February 21, 2006. Retrieved on July 25, 2006.</ref> As of November 30, 2006, revenue was $29.7 billion higher than it was one year ago.<ref name="NovemberSales">"November Sales." Wal-Mart. November 30, 2006. Retrieved on November 30, 2006.</ref> It is the largest private employer in the United States and Mexico.<ref name="WalMartFactsheet">Wal-Mart Corporate Facts." Wal-Mart. Retrieved on August 12, 2006.</ref> Wal-Mart is the largest grocery retailer in the United States, with an estimated 20 percent of the retail grocery and consumables business,<ref>Ortiz, John. "Can Kroger slow Wal-Mart?" Deseret Morning News. October 26, 2005. Retrieved on July 25, 2006.</ref> and is also the largest toy seller in the United States, with an estimated 45 percent of the retail toy business, having surpassed Toys "R" Us in the late 1990s.<ref>Byrnes, Nanette; Eidam, Michael. "Toys 'R' Us: Beaten At Its Own Game." Business Week. March 29, 2004. Retrieved on July 25, 2006.</ref>
Internationally, Wal-Mart operates in Mexico as Walmex, in the United Kingdom as ASDA and in Japan as The Seiyu Co., Ltd.. For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for approximately 20.1% of total sales.<ref name="annrep">."Wal-Mart 2006 Annual Report." Wal-Mart. 2006. Retrieved on July 26, 2006.</ref> Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the United Kingdom. Wal-Mart's investments outside of North America have produced mixed results. In 2006, Wal-Mart sold its retail operations in South Korea and Germany.<ref name="2006-3Q-8K">."Wal-Mart Reports Third Quarter Sales and Earnings." Wal-Mart. November 14, 2006. Retrieved on November 14, 2006.</ref>
Wal-Mart has been widely criticized for its policies and business practices by community groups, grassroots organizations, labor unions,<ref name="mkabel">Kabel, Marcus. "Wal-Mart, Critics Slam Each Other on Web." Washington Post. July 18, 2006. Retrieved on July 31, 2006.</ref> religious organizations,<ref>Sellers, Jeff M. "Women Against Wal-Mart." Christianity Today. April 22, 2005. Retrieved July 31, 2006.</ref><ref>Sellers, Jeff M. "Deliver Us from Wal-Mart?." Christianity Today. April 22, 2005. Retrieved on July 31, 2006.</ref> and environmental groups. Specific concerns include the corporation's extensive foreign product souring, treatment of employees and product suppliers, environmental practices, the use of public subsidies, and the economic impact of stores on the communities in which they operate.<ref>Copeland, Larry. "Wal-Mart's hired advocate takes flak." USA Today. March 13, 2006. Retrieved on July 31, 2006.</ref><ref>Rodino Associates. "Final Report on Research for Big Box Retail/Superstore Ordinance." Los Angeles City Council. October 28, 2003. Retrieved on July 31, 2006.</ref><ref>Smith, Hedrick. "Who Calls the Shots in the Global Economy?" PBS. Retrieved on July 31, 2006.</ref>
Contents |
[edit] History
Sam Walton's retailing career began when he accepted a job offer at a JC Penney store in Des Moines, Iowa on June 3, 1940 where he remained for eighteen months. In 1945, Walton 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 unable to 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. <ref name="BriefHistory">Frank, T.A. "A Brief History of Wal-Mart." The Washington Monthly. April 1, 2006. Retrieved on July 24, 2006.</ref>
In 1962, Walton opened the first Wal-Mart store, Wal-Mart Discount City, in Rogers, Arkansas.<ref name="timeline">"The Wal-Mart Timeline." Wal-Mart (published on walmartfacts.com). Retrieved on July 24, 2006.</ref> Within five years the company expanded to 24 stores across the state of Arkansas and reached $12.6 million in sales. In 1968 the company opened its first stores outside of 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, as well as 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 the company 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. In 2005, it was the world's second highest-grossing corporation.<ref name="2006-Fortune-Global500"/>
[edit] Subsidiaries
Wal-Mart's operations are comprised primarily in three retailing subsidiaries: Wal-Mart Stores Division U.S., Sam's Club, and Wal-Mart International.<ref name="annrep"/> 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.<ref name="annrep"/>
[edit] Wal-Mart Stores Division U.S.
Wal-Mart Stores Division U.S. is Wal-Mart's largest business subsidiary, accounting for 67.2% of fiscal 2006 net sales.<ref name="annrep"/> 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.
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 are a chain of discount department stores that range in size from 30,000 square feet (3,000 m²) to 224,000 square feet (21,000 m²) with an average size of approximately 102,000 square feet (9,500 m²).<ref name="annrep"/> They carry an amount of general merchandise products with a selection of food items. Many Wal-Mart Discount Stores also feature a garden center, a pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, as well as a fast food outlet.
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, Arkansas a year earlier, but all of these stores were later closed or converted into Discount Stores.
As of October 31, 2006, there were 1,100 Wal-Mart Discount Stores in the United States. The busiest Wal-Mart in the world is in Southaven, Mississippi.<ref name="corp_profile">"Corporate Profile." Wal-Mart. Retrieved on July 26, 2006.</ref>
[edit] Wal-Mart Supercenter
Wal-Mart Supercenter is a chain of hypermarkets that range in size from 99,000 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).<ref name="annrep"/> They carry everything a Wal-Mart Discount Store does in addition to 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", 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 October 31, 2006, there were 2,176 Wal-Mart Supercenters in the United States.<ref name="corp_profile"/>
[edit] Wal-Mart Neighborhood Market
Wal-Mart Neighborhood Market is a chain of supermarkets that average about 42,000 square feet (3,900 m²).<ref name="annrep"/> 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 October 31, 2006, there were 110 Neighborhood Markets in the United States.<ref name="corp_profile"/>
[edit] 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 United States.
As of October 31, 2006, there were 574 Sam's Clubs in the United States.<ref name="corp_profile"/>
[edit] Wal-Mart International
The operations of Wal-Mart International comprise 2,700 stores in 14 countries outside the United States.<ref name="Germany-8K">"Wal-Mart Announces Sale of German Business." Wal-Mart. July 28, 2006. Retrieved on August 15, 2006.</ref> According to Wal-Mart's 2006 Annual Report, International accounted for approximately 20.1% of fiscal 2006 sales.<ref name="annrep"/> Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico and the United Kingdom.
Wal-Mart has operated in Canada since their acquisition of the Woolco division of Woolworth Canada, Inc.<ref>"Company Profile." Wal-Mart Canada. Retrieved on September 12, 2006.</ref> 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.
Fiscal 2006 for Wal-Mart's United Kingdom subsidiary, ASDA, were 42.7% of the International segment sales. In contrast to Wal-Mart's U.S. 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 being their larger main rivals Tesco). At fiscal 2006, there were 236 ASDA stores, 10 George stores, 5 ASDA Living and 43 ASDA small stores.
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.<ref name="2006-3Q-8K"/> 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.<ref name="sec2006">"Wal-Mart SEC Form 10-K." United States Securities and Exchange Commission. January 31, 2006. Retrieved on July 26, 2006.</ref>
In 2004, Wal-Mart bought the Bompreço supermarket chain, comprised by 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, called 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 were 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 biggest supermarket chain in Brazil, only behind Carrefour and Pão de Açúcar.
In July 2006, Wal-Mart announced its withdrawal of operations from Germany because of sustained losses. The stores were sold to the German company METRO AG.<ref name="walmartgermany">Staff Writer. "Wal-Mart abandons German venture." BBC News. July 28, 2006. Retrieved on July 31, 2006.</ref> The sale was completed in Wal-Mart's fiscal third quarter.<ref name="2006-3Q-8K"/>
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. <ref name="walmartindia"> A. Giridharadas, S. Rai, "Wal-Mart to Open Hundreds of Stores in India", The New York Times." November 27, 2006. Retrieved on November 27, 2006.</ref>
[edit] Corporate affairs
Wal-Mart's business model is based on selling a wide variety of general merchandise and marketing, "always low prices."<ref name="annrep"/> The company refers to its employees as "associates." All Wal-Mart stores in the United States and Canada also have designated "greeters", whose general role is to welcome shoppers at the store entrance, as well as playing a role in loss prevention.<ref>Mikkelson, Barbara. "Code Adam." Snopes. December 31, 1998. Retrieved on August 3, 2006.</ref>
Unlike many other retailers, Wal-Mart does not charge a slotting fee to suppliers for their products to appear on the store.<ref name="nelson">Nelson, Emily. "Too Many Choices --- Nine Kinds of Kleenex Tissue, Eggo Waffles in 16 Flavors: Blame Brand Managers." Wall Street Journal. April 20, 2001. Retrieved on August 1, 2006.</ref> 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.<ref name="nelson"/>
On September 14, 2006, the company announced that it would be phasing out its layaway program, citing declining use and increased costs.<ref>Staff Writer. "Wal-Mart Will Phase Out Layaway Program." Wal-Mart. September 14, 2006. Retrieved on October 8, 2006.</ref> Layaway will be 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] 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.
Former members of the board include Hillary Clinton (1985-1992)<ref>Harkavy, Ward. "Wal-Mart's First Lady." The Village Voice. May 24, 2000. Retrieved on August 3, 2006.</ref> 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.<ref>Boulden, Jennifer. "Wal-Mart Former Vice Chairman Coughlin Admits Fraud." Bloomberg. January 31, 2006. Retrieved on August 3, 2006.</ref> On August 11, 2006, he was sentenced to twenty-seven months of home confinement, five years of probation, and ordered to pay $411,000 in restitution.<ref>Staff Writer. "Former Wal-Mart exec sentenced." CNN. August 11, 2006. Retrieved on August 11, 2006.</ref>
[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 and many other regional chains and independents. A niche has been carved out of Wal-Mart's dominance in the United States by several retail corporations.<ref>Stilgoe, John. Wal-Mart giant can be tamed The Boston Globe, 2003-11-23. Accessed 2006-01-11.</ref> 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."<ref>Berner, Robert. "Out-Discounting The Discounter." Business Week. May 10, 2004.</ref>
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, 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, Wal-Mart 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.<ref name="Struggling In Germany">Ewing, Jack."Wal-Mart: Struggling In Germany." BusinessWeek. April 11, 2005. Retrieved on July 27, 2006.</ref> In July 2006, Wal-Mart announced its withdrawal of operations from Germany because of sustained losses. Wal-Mart's stores are to be sold to German company METRO AG<ref name="walmartgermany"/> 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."<ref>Lee, Don. "Wal-Mart in fight for China's market." Los Angeles Times. July 25, 2006. Retrieved on July 27, 2006.</ref> 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.<ref>Sang-Hun, Choe. "Wal-Mart Selling Stores and Leaving South Korea." International Herald Tribune. May 23, 2006. Retrieved on July 27, 2006.</ref> In the United Kingdom, Wal-Mart's Asda subsidiary is the second largest chain in the UK after Tesco.<ref name="A Bumpy Ride in Europe">Fairlamb, David with Laura Cohn "A Bumpy Ride in Europe." BusinessWeek. October 6, 2003. Retrieved on July 27, 2006.</ref> 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 is a global company with a diverse customer base. Wal-mart customers place low prices and value as the most important reason for shopping at Wal-Mart. Financial results in 2006 have indicated Wal-Mart customers are sensitive to higher utility costs and gas prices.<ref>Wal-Mart Reports Second Quarter Sales and Earnings Walmart Press Release</ref>
In the United States, it has been reported that eighty percent of residents of the United States shop at Wal-Mart at least once a year.<ref>Wal-Mart CEO Lee Scott appears on the Charlie Rose ShowThe Charlie Rose Show</ref> And each week, 100 million customers visit Wal-Mart's U.S. stores - "more than one-third of the U.S. population."<ref>Wall Street Journal article Managing Wal-Mart: How U.S.-Store Chief Hopes to Fix Wal-Mart</ref>
Frequent Wal-Mart customers show some demographic trends. In the U.S., Wal-Mart customer's average incomes are below the national average. Analysts have estimated that more than one-fifth of Wal-Mart's U.S. customers have no bank accounts, twice the national rate.<ref>Liz Pulliam Weston National Bank of Wal-Mart?MSN Money</ref> 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 United States, Wal-Mart frequent shoppers were rated the most politically conservative.<ref>Jonathan Birchall and Holly Yeager Financial Times A purchase on psephology. August 17 2006 Page 9 US edition</ref> This also roughly correlates with the geographic distribution of Wal-Mart stores, as the company has yet to significantly penetrate major urban areas, which tend to be less conservative than suburban and rural areas, where most of Wal-Mart's stores can be found.
Wal-Mart has recently taken actions to expand its U.S. customer base. On September 7, 2006, the Wall Street Journal reported that Wal-Mart was modifying its U.S. 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."<ref>Reuters article Wal-Mart to drop one-size-fits-all approach: WSJ</ref> An example of the company's efforts to broaden its U.S. 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". It's noted that Wal-Mart rejected the American Family Association's recommendations by carrying the movie "Brokeback Mountain", a love story about two cowboys in Wyoming.<ref>Abigail Goldman Wal-Mart Reaches Out, Gets SlappedLos Angeles TimesAugust 252006</ref><ref>Frazier, Mia Wal-Mart Partners With Gay and Lesbian Group Advertising Age August 242006</ref>
[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."<ref>Reyes, Sonia. "Study: Wal-Mart Private Brands Are Catching On." Brandweek. August 21, 2006. Retrieved on August 23, 2006.</ref>
[edit] Diversity
In 1999, according to data from the Equal Employment Opportunity Commission, Wal-Mart ranked well below its current retailing peers, which have an average of 56% female managers. Female employees at Wal-Mart make up 72% of its workforce, but only one-third of its management, a percentage that was typical in 1975.<ref>Conlin, Michelle. "Is Wal-Mart Hostile to Women?" Business Week. July 16, 2001. Retrieved on October 1, 2006.</ref><ref>Zellner, Wendy. "No Way to Treat a Lady?" Business Week. March 3, 2003. Retrieved on October 1, 2006.</ref>
Wal-Mart has received improving scores on the Corporate Equality Index, published by the Human Rights Campaign, a measure of how companies treat gay and lesbian employees and consumers. The company received a 65% rating in the 2006 edition.<ref>"Corporate Equality Index." Human Rights Campaign. 2006. Retrieved on November 2, 2006.</ref> Previously, Wal-Mart had received a 57% rating in the 2005 edition, a 43% rating in the 2003 and 2004 editions, and a 14% rating in the 2002 edition.<ref>"Corporate Quality Index." Human Rights Campaign. 2002. Retrieved on October 1, 2006.</ref><ref>"Corporate Equality Index." Human Rights Campaign. 2005. Retrieved on October 1, 2006.</ref> Wal-mart's improved score in 2003 accompanied an expanded antidiscrimination policy to protect gay and lesbian employees<ref>Kershaw, Sarah. "Wal-Mart Sets a New Policy That Protects Gay Workers." New York Times. July 1, 2003. Retrieved on October 1, 2006.</ref>, Walmart's improved score in 2005 accompanied a new definition of family that included same-sex partners.<ref>"HRC Applauds Wal-Mart's Inclusive Family Policy" (press release). Human Rights Campaign. January 27, 2005. Retrieved on October 1, 2006.</ref>
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."<ref>Kabel, Marcus. "Wal-Mart CEO expects record profits." Deseret News. January 5, 2006. Retrieved on December 1, 2006.</ref>
[edit] Criticism
Wal-Mart has been the subject of criticism from community groups, grassroots organizations, trade unions,<ref name="mkabel"/> and environmental groups. Specific concerns include the company's extensive foreign product sourcing, treatment of employees and product suppliers, environmental carelessness, use of public subsidies, and store impacts on local communities and businesses. Additionally, Wal-Mart has faced accusations of illegal activities, including predatory pricing, discrimination and violation of labor laws.
[edit] Local Communities
When planning new store locations, Wal-Mart often faces many concerns from the affected communities. Local critics that oppose new Wal-Mart store openings cite concerns such as traffic problems, environment problems, public safety, absentee landlordism, bad public relations,<ref>Washburn, Gary; Meyer, H. Gregory. "Wal-Mart hasn't written off city." Chicago Tribune. September 1, 2004. Retrieved on August 4, 2006.</ref><ref>Baldacci, Leslie. "Thousands apply for jobs at new Wal-Mart." Chicato Sun-Times. January 26, 2006. Retrieved on August 4, 2006.</ref> low wages and benefits, and predatory pricing.<ref name="wm_vs_ad">"Wal-Mart Stores, Inc. vs. American Drugs, Inc.: Arkansas Supreme Court Decision." (Case No. 94-235). Arkansas Supreme Court. January 9, 1995. Retrieved on August 4, 2006.</ref><ref name="The Hometown Advantage">Staff Writer. "Wal-Mart Settles Predatory Pricing Charge." The Hometown Advantage. October 1, 2001. Retrieved on August 4, 2006.</ref><ref name="German High Court">Staff Writer. "German High Court Convicts Wal-Mart of Predatory Pricing." The Hometown Advantage. February 1, 2003. Retrieved on August 4, 2006.</ref> Critics that defend Wal-Mart cite consumer choice, economic studies,<ref name="sobel_dean">Sobel, Russell S.; Dean, Andrea M. "Has Wal-Mart Buried Mom and Pop?: The Impact of Wal-Mart on Self Employment and Small Establishments in the United States." West Virginia University. Retrieved on August 4, 2006.</ref> as well as the underlying political response.
On November 29, 2006, the City Council of San Diego voted 5-3 to prohibit stores of more than 90,000 square feet that use 10 percent of space to sell groceries and other merchandise that is not subject to sales tax. This action was aimed specficially at preventing Wal-Mart from opening a Supercenter within San Diego city limits. <ref>San Diego to Ban Wal-Mart Supercenters. Biz San Diego Magazine. Retrieved on 2006-11-29.</ref>
[edit] Use of foreign labor
In the United States, one common criticism derives from claims that Wal-Mart uses cheap, foreign labor in an attempt 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 percent of the total US trade deficit with China as of 2004.<ref>Wal-Mart's Imports Lead to U.S. Jobs Exports. AFL-CIO (2006). Retrieved on June 21, 2006.</ref> While Wal-Mart highlights its US suppliers, 60% of its products are imported from other countries as of 2004, compared with 6% in 1996.<ref name="pbs-gereffi">"Is Wal-Mart Good for America? Interview with Gary Gereffi." PBS. Retrieved on July 31, 2006.</ref> Other Wal-Mart goods have been manufactured and imported from such places as South Korea, Philippines, Malaysia, Cambodia, Thailand, and Vietnam.
[edit] Health care and employee benefits
Another United States-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 U.S. workers.<ref name="stepped-up">Bernstein, Aaron. "A Stepped-Up Assault on Wal-Mart", Business Week, 2005-10-20.</ref> 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.<ref>Wysocki, Bernard Jr., and Ann Zimmerman. "Wal-Mart Cost-Cutting Finds a Big Target in Health Benefits", Wall Street Journal, 2003-09-30, p. 1.</ref> 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."<ref>Fulton, Deirde. "No sympathy for the devil", Boston Phoenix, 2005-10-14.</ref> 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, as well as extending the coverage to include children.<ref name="newplan">Freking, Kevin. "Wal-Mart to Offer More Health Coverage." ABC News. April 17, 2006. Retrieved on August 7, 2006.</ref> The company estimates that this new change could add 150,000 workers to health coverage plans, if all eligible choose to take part.<ref name="newplan"/> However, there is concern that since the new plan provides a benefit only after a $1,000 deductible is paid ($6,000 for a family), many workers will be unable to afford the coverage and will opt not to participate in the plan.<ref name="newplan"/>
The State of Maryland passed a controversial bill in January of 2006 requiring that all corporations with more than 10,000 employees in the state 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.<ref>"Md. forces Wal-Mart to spend more on health", Associated Press, 2006-01-13.</ref> 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." <ref>"Md. 'Fair Share' law loses in court", United Press International, 2006-07-19.</ref>
[edit] Employee and labor relations
- See also: Wal-Mart employee and labor relations
Wal-Mart has been criticized for their aggressive policies against labor unions. In North America, the company has largely thwarted unionization through aggressive anti-union tactics such as managerial surveillance and pre-emptive closures of stores or departments who choose to unionize.<ref>Dicker, John. "Union Blues at Wal-Mart." The Nation. June 20, 2002. Retrieved on July 26, 2006.</ref> Wal-Mart's anti-union policy at home is also used in Canada, as well as 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.<ref>Bianco, Anthony. "No Union Please, We're Wal-Mart ." Business Week. February 13, 2006. Retrieved on July 26, 2006.</ref><ref>Staff Writer. "Wal-Mart faces Canadian labour clash." MSNBC. April 30, 2006. Retrieved on July 26, 2006.</ref><ref name="Struggling In Germany"/> In countries that require unions or the option to join a union, such as Germany and China, Wal-Mart allows them.<ref name="A Bumpy Ride in Europe"/>
Wal-Mart's strict work regulations and management practices have repeatedly invoked criticism in foreign countries.[citation needed] For instance, a German court ruled in 2005 that Wal Mart's policy of forbidding dating relationships and strongly discouraging flirting among coworkers is against German law and therefore does not apply to the company's German stores. 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 equally illegal under German labor legislation.<ref>[1]</ref>
In August 2006 Wal-Mart announced that it will allow workers at all of its Chinese stores to become members of trade unions. The US retailer said it would work with the state-sanctioned All-China Federation of Trade Unions (ACFTU) on representation for its 28,000 staff. <ref>Wal-Mart workers in China form first union AFP July 29, 2006</ref><ref>"Wal-Mart SEC Form 10-Q." United States Securities and Exchange Commission. October 31, 2005. Retrieved on July 31, 2006.</ref>
In August 2006, the company announced that it would roll out an average pay increase of 6% for all new hires at 1,200 U.S. Wal-Mart and Sam's Club locations, and at the same time would institute pay caps on veteran workers.<ref>Goldman, Abigail. "Wal-Mart to Raise and Limit Wages." Los Angeles Times. August 8, 2006. Retrieved on August 24, 2006.</ref> 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.
Wal-Mart's United Kingdom subsidiary, ASDA, was voted a top ten UK employer by the UK newspaper Sunday Times Top 100 Best Employers Survey in 2003, 2004 and 2005.<ref>Staff Writer. "100 Best Companies to Work For: 2005 (ASDA)." The Times. Retrieved on September 6, 2006.</ref>
[edit] References
[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.
[edit] External links
- Wal-Mart Stores, Inc. websites:
- Maps showing Wal-Mart store density and saturation in U.S.
- Articles, Studies and Resources on Wal-Mart at ReclaimDemocracy.org
- The Trolley War Between Tesco and Walmart
| Wal-Mart Stores, Inc. |
|
Key People: Sam Walton | David Glass | Lee Scott | Jim C. Walton | Bud Walton | S. Robson Walton | Douglas Daft |
|
Assets: Amigo Supermarkets | ASDA | Sam's Club | Wal-Mart Discount Stores | Wal-Mart Neighborhood Market | Wal-Mart Supercenter | Walmex |
|
Annual Revenue: $288 billion USD (Image:Green Arrow Up.svg10% FY 2005) | Employees: 1.7 million | Stock Symbol: NYSE: WMT | Website: www.walmartstores.com |
</div> </div>da:Wal-Mart de:Wal-Mart es:Wal-Mart eo:Wal-Mart fr:Wal-Mart id:Wal-Mart it:Wal-Mart he:וול-מארט hu:Wal-Mart nl:Wal-Mart ja:ウォルマート no:Wal-Mart pl:Wal-Mart pt:Wal-Mart ru:Wal-Mart sq:Wall-Mart simple:Wal-Mart fi:Wal-Mart sv:Wal-Mart th:วอล-มาร์ต tr:Wal-Mart zh:沃尔玛
Categories: Companies listed on the New York Stock Exchange | Articles with unsourced statements | Companies established in 1962 | Companies based in Arkansas | Dow Jones Industrial Average | S&P 500 | Fortune 1000 | Forbes 2000 | Online retail companies of the United States | Multinational companies | Retail companies of the United States | Discount stores of the United States | Wal-Mart
