A Meeting with H. Lee Scott

I ask Lee to describe the legacy he wants to be remembered for at Wal-Mart. He struggles with the question, falls back on the Sam Walton story, and describes himself as continuing a tradition rather then designing a new purpose for the giant company. Pressing him again for a better answer, he talks about the team
he wants to build and leave behind when he “turns out the lights in the office for the last time.” In effect, he keeps saying it’s not about him.

Pressed again, at this point a little uncomfortably, he talks about being the best they can be, about diversity programs, environmental initiatives, the careers they help their associates build. But nothing that feels like a clear purpose or focused direction.

I take a different tact. I admit that I, like hundreds of other critics, have my own perspective on what Wal-Mart is doing right (not much) and wrong (a lot) when it comes to corporate responsibility. On how to proactively manage the endless bad press they get. How they could go about seizing their potential. Did they want to hear my thoughts? Why not, they answer. Everyone else comes down here and tells us what they think we should do. We’re used to it at this point.

This is written by someone from Seventh Generation. Seventh Generation is a precept of the Great Law of the Haudenosaunee (Six Nations Iroquois Confederacy), which requires that chiefs consider the impact of their decisions on the seventh generation. Read it all here.

Vast Wealthy Transplant Conspiracy in SL

Revenge of the Wal-Mart Voters

Interesting politcal/Wal-Mart article by Ryan Sager on realclearpolitics.org (a conservative political website)

What's Wal-Mart got to do with anything? Not a whole lot, except as a symbol of a particular type of voter: largely Southern, rural, lower-middle-class, female, socially conservative -- not big fans of tax cuts, but huge fans of government programs.

Zogby finds that while 85 percent of frequent Wal-Mart shoppers voted for President Bush's reelection in 2004 (and 88 percent of people who never shop there voted for Sen. John Kerry), Wal-Mart voters have turned on the president dramatically. In a poll taken earlier this month, they gave Bush a 35 percent approval rating -- compared to a 45 percent positive rating from born-again Christians, 49 percent from NASCAR fans, and 54 percent from self-identified conservatives.

The correlation between cheap underwear and populist politics could evaporate as the Wal-Mart brand evolves to fit a more urban and upscale market.

Wal-Mart voters are simply not a viable, reliable conservative constituency.

Go you fickle Wal-Mart shoppers!

Winn-Dixie Files for Bankruptcies

Care to guess the reason? Here.

Movie At LPCA

Friday, June 30
7:30pm FILM:
Independent America:
The Two Lane Search for Mom & Pop

These days, you have to go out of your way if you want to do business
with Mom & Pop. One couple has taken that notion a little bit farther,
13,000 miles to be exact. Self-imposed road rules bar them from major
highways and corporate chain retail. Independent filmmakers and
award-winning journalists, Hosein and Hughes, take the road less
traveled in a thought provoking documentary, which uncovers the growing
opposition to big box retail across the U.S. and the often desperate
fight being waged by independent retailers to stay alive.
(USA/CA, 2005, 80mins., NR, Dir. Hanson Hosein & Heather Hughes)
Tickets: $6

One Reason Wal-Mart Must Grow at Any Cost

Yes, Another ADE Poll

From your friendly Adirondack Daily Enterprise: Are you in favor of a community-owned department store for Saranac Lake?

Current results (6/29):

Yes: 71.3%
No: 27.2%
Undecided: 1.5%

Now why would anyone be opposed to a community department store in Saranac Lake? A community department store certainly would not be competition to a Wal-Mart or other large retailer. The Comm. for the Advancement of Retail Development should be overjoyed with the thought of a new retail store. They are for advancement of retail development, says so right in their name.

Go here to read the comments left on the poll site.

It took a couple days, but the nastier comments are now arriving. The nasty comments seem to correlate with an uptick in the number of 'NO' voters.

UPDATE: So far approximately 90 comments. 44 of them generally in favor of a community department store and 45 opposed. More than half of those opposed to a CDS seem to think they have to write uncivil comments. I guess Wal-Mart really brings out the best in people.

Hot Off the Press

Wrestling With Wal-Mart: Tradeoffs Between Profits, Prices and Wages by Bernstein, Bivens and Dube. Find the report here(pdf). You probably need to be a trained economist to understand the math in the appendix of this paper. You can also read a news release about the paper called 'The Wal-Mart debate A false choice between prices and wages' here.

To get a feel for how much of a wage increase could be financed out of reduced profit shares, one can imagine Wal-Mart's profit margins falling back down to their 1997 levels, which would also cut half of the difference between their margins and a key Wal-Mart competitor, Costco (which posted a profit margin of 2.0% in 2005). Reducing the profit margin by this much would give Wal-Mart $2.3 billion to plough into improved worker compensation without the need to raise prices. In Wrestling With Wal-Mart, we calculate that this would translate into just under $2,100 per non-managerial employee. Simply returning to its 1997 net profit margins, Wal-Mart could give its non-supervisory workers 13% pay increases without raising prices, while maintaining higher profit margins than a main competitor.

Wal-Mart could definitely raise compensation for its workers and still have lower prices than its competitors. Note that labor costs for its non-supervisory staff account for less than 7% of its total sales. If Wal-Mart's price advantage relative to its competitors is even in the neighborhood of what its defenders claim, consumers would still find Wal-Mart's prices lower. To believe otherwise is to believe that Wal-Mart's price advantage comes completely from substandard worker pay and not through any cost efficiencies.

Wal-Mart does a lot right. It has expanded productivity by being more efficient and leaner than many other companies. Many of the benefits shoppers accrue from Wal-Mart's expansion could be preserved even if the retailer had to meet the expectations of its critics regarding fair worker compensation. Defenders of the company too often set up false dichotomies such as low prices vs. high wages when in reality, better compensation for workers won't negate Wal-Mart's competitive edge.

Good Wal-Mart Debate at Slate

Barbara Ehrenreich, ex-Wal-Mart employee, author of Nickle and Dimed a story about how she lived a low wage earners life debates economist Jason Furman, author of Wal-Mart: A progressive success story.

Barbara makes some good points:

And it is because we appreciate the low prices that we are not yelling: Stamp out the Beast! Crush it before it can bud off yet another Super Store!We are saying, pretty calmly for the most part: Why can't it be better? Why can't it offer decent-paying jobs as well as low prices, especially if it's such a genius, as you say, at increasing productivity?

The problem isn't Wal-Mart, we critics like to say, it's the Wal-Martization of the entire economy, which involves not only low wages at Wal-Mart itself but depressed wages throughout the company's whole supply chain as well as at competing companies (e.g., supermarkets).

Jason counters:

Maybe you're ready to grant my point that Wal-Mart's low prices are great for the 298 million Americans who don't work there. But what about the 1.3 million Americans who do work for Wal-Mart? Here the evidence is murkier, in part because Wal-Mart refuses to release the data on its wages and benefits that could clear up a number of questions. What we do know is that its wages and benefits are about average for the retail sector—which is to say, not so great.

But I understand why progressives are so upset about low wages and inadequate benefits. I am also upset by the rise of inequality and the relatively slow economic progress that the bottom 80 percent of Americans have made over the last several decades. I just think Wal-Mart is the wrong place to put the blame or to expect the solution.

Now imagine that Best Buys across the country were replaced by Stereo Exchanges. We would have more "good jobs" and fewer "bad jobs." The average wage in the electronics retail sector would go up. But where would all the former Best Buy workers go? Most of them wouldn't work at Stereo Exchange. Maybe some would take a pay cut and work at McDonalds.

Sounds like he is saying big box stores are there to provide jobs to dummies.

Barbara:

I'm a little baffled by your Best Buy/Stereo Exchange example. If Stereo Exchange took over from Best Buy, there'd be a lot more better-paying jobs in the retail electronics business. Why wouldn't the former Best Buy workers take a lot of these new and better jobs? They're not all as clueless as you seem to think.

You ask, in so many words, why pick on Wal-Mart when there are so many equally Scrooge-like employers around? Why not go after, say, the bodega on the corner? Well, the question answers itself. By gobbling up thousands of acres of farmland and suburban sprawl to feed its relentless appetite for growth, recruiting (and spitting out) thousands of workers a day, and achieving near-monopoly status in some parts of the country, Wal-Mart has made itself into an unmissable target for anyone concerned about poverty and mounting inequality. The bodega may be bad—not to mention any number of retail chains other than Wal-Mart—but you might as well start with the biggest piggy of all, which is the largest single private employer in America.

Why can't more people understand this point?

You're arguing, essentially, that whatever misery Wal-Mart workers endure is compensated for by the low prices Wal-Mart consumers enjoy. The same could be said of other workers who provide services to working-class people, like those in the fast-food and child-care industries: Their atrocious wages help keep prices low for impecunious parents and burger-eaters. In other words, the working class can only advance on the backs of (some of) its own members. Sacrifice one group to keep the others afloat, so that the class struggle is replaced by a kind of Darwinism internal to the working class.

I believe this debate goes on all week.

What is a Community Retail Store?

From some of the comments published on the ADE webpoll it seems there is some confusion about 'Community Retail Stores'.

A community department store is not a co-operative. You don't need to be a 'member', anyone can shop there.

A community department store is a corporation, owned by investors (restricted to community members) and overseen by a board of directors that are responsible to a set of bylaws.

If a community department store runs into financial difficulties, it is the investors that take the financial hit. Investors own shares of the corporation. Investors cannot be assessed additional monies.

What if a larger department store opens in the area causing financial problems to a community department store? Presumably the investors lose their money. A risk they were willing to take.

A community department store will just be like a Wisebuys or Dollar Store. Maybe, maybe not. If a community department store is not to your liking, you have the option of not shopping there.

The Powell Merc only pays their employees $6-7 per hour and no benefits. So what, Powell will not own our community department store. We can do what we think is right.

A community department store is not a community organization in the sense that it is a club, fraternal organization or even a volunteer fire department. It is a corporation, recognized by the state, owned by investors, who happen to be interested community members.

But Wal-Mart.... To hell with Wal-Mart. If Wal-Mart's financial future is dependent on locating in Saranac Lake, it is way too late to be concerned about them. They probably have the support to build a smaller store in the downtown area. This apparently does not interest them.

Let's Be Civil

"Adirondack natives are intelligent, wise, hard-working and generous".

Generally speaking, yes. However, every now and then you get a letter like this one.

Unthinking letters are one thing, but this 'major retailer' issue has devolved into unknown persons leaving anonymous hate mail in a village trustee's mailbox. This is not only uncivil, it's against the law.

Waltons - Where are you?