Wal-Mart Stores, Inc. is the world's largest retailer and the largest company in the world based on revenue. In the fiscal year ending January 31, 2004, Wal-Mart had $256.3 billion in sales and $8.9 billion in income. Forbes magazine points out that if Wal-Mart were its own economy, it would rank 30th in the world, right behind Saudi Arabia.
As of July 2004, the company had
- 1,409 Wal-Mart stores,
- 1,562 Supercenters,
- 539 SAMÒS CLUBS, and
- 70 Neighborhood Markets in the United States.
Outside of the U.S., the company operates stores in Mexico (626 stores), the United Kingdom (269, mostly ASDA supermarkets), Canada (236), Brazil (144), Germany (92), and Puerto Rico (54). Wal-mart also has between ten and fifty stores in Argentina, China, and South Korea.
Sam Walton, the founder of Wal-Mart, opened the first Wal-Mart store in Rogers, Arkansas in 1962. The company is publicly traded at the New York Stock Exchange under the symbol WMT and has its headquarters in Bentonville, Arkansas. As of March 31, 2004, there were 333,604 shareholders of Wal-Mart's common stock.
Wal-Mart operates large discount retail stores selling a broad range of products such as clothing, consumer electronics, drugs, outdoor equipment, guns, toys, hardware, CDs and books. It typically stocks basic rather than premium products. Wal-Mart also operates "Supercenters" which include grocery supermarkets. SAM'S CLUB stores are also owned by Wal-Mart; these are "warehouse clubs" which, like Costco, require membership dues.
Each Wal-Mart store has an employee, often an older person, known as a "greeter", whose primary responsibility is to welcome people to the store. One Wal-Mart training video encourages employees to think of themselves not as employees but as "associates" and their superiors as "servant leaders." The training video You've Picked a Great Place to Work promotes the "essential feeling of family for which Wal-Mart is so well-known." (Ehrenreich pp. 143-4) Employees start the work day with a gathering and the "Wal-Mart cheer".
In late 2003, the company undertook an unusual step after failing to gain the support of the Inglewood, California City Council for a proposed development of a supercenter. The council had cited a wide range of concerns, including traffic, the environment, labor practices, and public safety. In response, Wal-Mart obtained the signatures of thousands of voters, forcing the council to call a special election. The resulting 71-page measure, Initiative 04-A, asked voters to allow the company to create its supercenter and a collection of chain shops and restaurants on a sixty-acre parcel near Hollywood Park Racetrack. The proposal exempted the company from all of Inglewood's planning, zoning and environmental regulations. The special election was held April 7, 2004; by a 60-40 margin the Wal-Mart proposal was defeated.
|Table of contents|
3 Criticism of Wal-Mart
4 Product controversy
6 External links
Reasons for financial success
Wal-Mart is financially successful by a number of measures. For example, Wal-Mart is now the #1 grocery chain in the United States, with 14 percent of all grocery sales in the country, with nearly twice the sales of Kroger ($95 billion vs. $51 billion). Wal-Mart also does 20 percent of the retail toy business.
Different explanations have been offered for this success:
- Some stress the economies of scale Wal-Mart brings to manufacturing and logistics; the purchase of massive quantities of items from its suppliers combined with a very efficient stock control system help make Wal-Mart's operating costs lower than those of its competitors. They are leaders in the field of vendor managed inventory -- asking large suppliers to oversee stock control for a category and make recommendations to Wal-Mart buyers. This reduces the overhead of having a large inventory control and buying department. Wal-Mart's vast purchasing power also gives it the leverage to force manufacturers to change their production (usually by creating cheaper products) to suit its wishes: a single Wal-Mart order can easily comprise a double-digit percentage of a supplier's annual output.
- Some allege that Wal-Mart accepts short-term losses predatory pricing in order to drive competitors out of business and increase market power. However, no predatory practices have been proven at this time. Wal-Mart also has translated its economic power into political favoritism and garnered millions of dollars in direct public subsidies and indirect subsidies through such means as confiscation of private property via eminent domain takeovers.
Criticism of Wal-Mart
Communities often organize campaigns opposing proposed new Wal-Mart stores. Critics and academic studies note that Wal-Mart displaces locally owned stores and results in the community losing potential assets to the corporate headquarters. This is the same sort of economic issue which leads to tariffs at the international level. In short, Wal-Mart is viewed as an absentee landlord.
None of Wal-Mart's stores are unionized (as of 2003). Like many US retailers, a high proportion of the employees are temporary (around 33% as of 2002). The company is the target of persistent unionizing efforts, but has aggressively (and sometimes illegally) fought off all attempts. In 2000, the meat-cutting department of the Wal-Mart superstore in Jacksonville, Texas voted to unionize; two weeks later, Wal-Mart shut down all its meat-cutting operations. Employee Kathleen Baker submitted a petition from 80 Wal-Mart employees which requested wage increases; she was then fired for "theft" of the company typewriter. at Wal-Mart are about 20% less than at comparable companies. Walton once argued that his company should be exempt from the minimum wage. (Palast -- pp. 121)
Wal-Mart is the most often sued corporate entity in the United States. Its legal department has a reputation among personal injury lawyers for extremely aggressive legal tactics, and the corporation has been sanctioned by several courts for failing to respond properly to plaintiff discovery motions.
Wal-Mart managers have sometimes pressured employees to work "off-the-clock" after they have worked 40 hours in order that overtime pay may be avoided.
As of 2000, Wal-Mart, like many large American corporations with low-wage employees, screens potential hires through a drug test, in addition to a multiple choice personality test, which asks applicants to express their level of agreement with statements such as "rules have to be followed to the letter at all times." (Ehrenreich, p. 124)
Wal-Mart is also criticized for maintaining an atmosphere in which it might appear that they predominantly carry products "Made in America", whereas in reality, the vast majority of Wal-Mart products are not made within the United States. Indeed, critics charge that its relentless pressure on suppliers to cut costs have forced suppliers to move production overseas. Greg Palast reports that Chinese dissident Hongda Wu discovered, in 1995, that Wal-Mart was contracting prison "slave labor in Guangdong Province. Wu and Palast argue that numerous items at Wal-Mart are made by the Chinese People's Liberation Army. It should be noted that Hongda Wu is a convicted felon who served 19 years in China. The "slave labor" are hard labor prison in China, it should also be noted that American prisons also produce products and hence slave labor. Michael Moore's recent documentary showed American prisoners making jeans and providing travel advices for several states. In Bangladesh, Palast reported that in 1992 teenagers were working in "sweatshops" approximately 80 hours per week, at $0.14 per hour, for Wal-Mart contractor Beximco. In 1994, Guatemalan Wendy Diaz reported that, at the age of 13, she had been working for Wal-Mart at $0.30 per hour. (Palast pp. 119-120)
In 2004, a class-action suit affecting as many as 1.6 million current and former female employees was brought against Wal-Mart. This makes it the largest private-employer civil-rights case in U.S. history. The case is based on statistics that show that women working at Wal-Mart are paid less than man in every region and in most job occupations and take longer to enter management positions.
In 2002 and 2003, Wal-Mart decided not to carry certain products, because of racy content, such as Maxim, FHM and Stuff (magazine) magazines. However, men's magazines were not singled out, as they also strategically "covered up" certain fronts of Redbook, Cosmopolitan and Marie Claire due to alleged customer complaints. Some music sold in Wal-Mart had obscenities overdubbed with less offensive lyrics, such as albums from Lauryn Hill and The Fugees or are removed from the shelves for lyrics critical of Wal-Mart, such as those by Sheryl Crow. While some see it as a troubling case of censorship, others view it as Wal-Mart sticking to the so-called "sensibilities of middle America".