Wal-Mart

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Wal-Mart Stores, Inc.

Type	Public
Founded	Rogers, Arkansas, 1962
Location	Bentonville, Arkansas, USA
Key people	Sam Walton 1918 to 1992, Founder H. Lee Scott, CEO S. Robson Walton, Chairman
Industry	Retail (Department & Discount)
Products	Wal-Mart Discount Stores Wal-Mart Supercenter Sam's Club Neighborhood Markets
Revenue	$288 billion USD ($29B FY 2005)
Employees	1.7 million
Website	www.walmartstores.com

Wal-Mart Stores, Inc. (NYSE: WMT), founded by Sam Walton in 1962, is the largest retailer and the largest company in the world based on revenue. For the fiscal year ending January 31, 2005, Wal-Mart reported net income of US $10.3 billion on US $285 billion of sales revenue (3.6% profit margin). If Wal-Mart were its own economy, it would rank 33rd in the world, with a GDP between those of Ukraine and Colombia. It is the largest private employer in the United States, Mexico and Canada. It holds an 8.9 percent retail store market share— $8.90 out of every $100 spent in U.S. retail stores is spent at Wal-Mart.

Contents 1 History 2 Business 2.1 Competition 2.2 Wal-Mart TV Network 2.3 Contributions 2.4 Renewable energy experiments 3 Employees 3.1 Wal-Mart benefits 4 Financial results 5 Public relations 6 Criticism 6.1 Dumping 6.2 Use of overseas labor 6.3 Opposition to unions 6.4 Wages 6.5 Labor laws and working conditions 6.6 Taxes 6.7 Allegations of gender discrimination 6.8 Health insurance memo 6.9 Illegal use of undocumented workers 6.10 Workforce diversity 6.11 Product controversy 6.12 Supplier relations and predatory pricing 6.13 Local community impacts 7 Wal-Mart in popular culture 8 Statistics 8.1 Retail operations 8.2 Store counts & revenue 8.3 Key employees 9 References and External Links 9.1 See also 9.2 External Links 9.3 Documentaries 9.4 Books about Wal-Mart 9.5 Footnotes

History

• 1962 First Wal-Mart store opens in Rogers, Arkansas
• 1969 The company incorporates as Wal-Mart Stores, Inc. on October 31, 1969.
• 1972 Wal-Mart listed on the New York Stock Exchange.
• 1983 First Sam's Club opens in Midwest City, Oklahoma.
• 1987 Wal-Mart completes largest private satellite communication system in the U.S.
• 1988 First Supercenter opens in Washington, Missouri.
• 1990 Wal-Mart becomes nation's largest retailer.
• 1991 The first store outside of the U.S. opens, in Mexico City.
• 1994 Wal-Mart acquires 122 Woolco stores in Canada.
• 1996 Wal-Mart enters China through a joint-venture agreement.
• 1997 Wal-Mart replaces Woolworth on the Dow Jones Industrial Average. Woolworth's Square One Shopping Centre location in Canada becomes the chain's biggest store, at 220,000 square feet (20,000 m²).
• 1997 Wal-Mart becomes largest private employer in the United States, with 680,000 employees worldwide.
• 1997 Wal-Mart has its first $100 billion sales year.
• 1998 First Wal-Mart Neighborhood Market opens
• 1999 Wal-Mart has 1,140,000 employees, making it the largest private employer in the world. It acquires the ASDA Group with 229 stores in the United Kingdom.
• 2003 Wal-Mart sets a single-day sales record of $1.52 billion on Black Friday.
• 2004 Wal-Mart buys the Amigo supermarket chain in Puerto Rico for $17 million.
• 2004 Wal-Mart employees in Jonquière, Quebec, Canada vote in favor of becoming the first unionized Wal-Mart in North America. Five months later, Wal-Mart announces that it would close the store due to poor sales.
• 2005 The Center for Community & Corporate Ethics launches http://walmartwatch.com/ to encourage Wal-Mart to have more corporate responsibility.
• 2005 Wal-Mart launches http://www.walmartfacts.com/ in a public relations effort to counter critics.
• 2005 Wal-Mart seeks to expand to urban markets, most notably New York City, Chicago, and Los Angeles.

Business

Wal-Mart operates discount retail department stores selling a broad range of non-grocery products. Wal-Mart also operates "Supercenters" which offer a full line of grocery items. Wal-Mart also operates Sam's Club—a "warehouse clubs" similar to Costco that sells discounted bulk merchandise to dues-paying members.

As of January 2005, Wal-Mart employed 1.3 million people in the United States. Wal-Mart's corporate headquarters are located in Bentonville, Arkansas. Apart from retail locations, it operates 99 Distribution Centers and Transportation Offices in the United States. Internationally, Wal-Mart employs over 410,000 people (excluding Japan) for a company-wide total of 1.7 million employees. Wal-Mart also operates the largest real estate company in the United States, with an entire division devoted to building new stores, selling old stores, and developing shopping centers around its stores. In addition to its wholly-owned international operations, Wal-Mart owns a 42% stake in The Seiyu Co., Ltd. in Japan, with a proposed US$597 million to increase its stake to 50%. This purchase is subject to the shareholders vote in December 2005.

In the past, Wal-Mart operated dot Discount Drugs, Bud's Discount City, Hypermart*USA, OneSource Nutrition Centers, and Save-Co Home Improvement stores. In 1990 Wal-Mart acquired The McLane Company, a foodservice distributor. In 2003 McLane Company was sold to Berkshire Hathaway.

Wal-Mart stock is publicly traded on the New York Stock Exchange under the symbol WMT.

Competition

Wal-Mart's chief competitors in the discount retail space nationally include the Sears Holdings Corporation (Kmart) and the Target Corporation, along with many smaller regional chains such as Meijer in the midwest. Wal-Mart's move into grocery has also positioned it against major grocery chains such as Kroger, Publix, and local grocery chains. In the Sam's Club warehouse business, Wal-Mart's chief competitor is Costco, which is slightly larger than Sam's in terms of sales, as well as the smaller BJ's Wholesale Club chain operating mainly on the East Coast.

Wal-Mart TV Network

The Wal-Mart TV Network is an in-store network showing commercials for products sold in the stores, concert clips and music videos for recording artists products sold in the stores, trailers for upcoming movie releases, and news. According to a New York Times story, it is seen by 130 million people a month, making it the fifth largest network in America, behind NBC, CBS, ABC and Fox.

Contributions

In 2004, cash donations to non-profit organizations by Wal-Mart, its employees, and its customers made through Wal-Mart, the Wal-Mart Foundation and the Sam's Club Foundation totaled more than $170 million (approximately 0.06% of Wal-Mart's gross revenue and 1.6% of net income). The typical Supercenter channels $30,000 to $50,000 a year to local causes and events, some of which may include self-promotion, such as ads in brochures and playbills. More than 90 percent of cash donations from Wal-Mart Stores and the Wal-Mart & SAM'S CLUB Foundation target local communities.

After the 2005 Hurricane Katrina disaster on the United States Gulf Coast, Wal-Mart donated $2 million to the Salvation Army and the American Red Cross and $15 million to the Bush-Clinton Hurricane Katrina Fund for a total of $17 million. These donations, while a small fraction (0.005%) of its annual revenue [1], made it the largest single corporate contributor. An estimated $3 million in merchandise was donated to victims in several states, and in some cases the corporation was able to provide supplies before the federal government. An emergency contact website was set up by Wal-Mart to help locate displaced persons, accessible by Internet and at every store in the country. About $1.5 million in emergency aid was given to displaced employees, and employees displaced by the storm were offered work at Wal-Mart locations elsewhere in the country.

Renewable energy experiments

Among more than 3,300 U.S. stores, the corporation has designed one, scheduled to open in 2005 in McKinney, Texas, featuring a wind turbine, photovoltaic solar panels, and a biofuel-capable boiler. The building includes many other energy and cost-saving technologies.

The Institute for Local Self-Reliance, while acknowledging that [2] "the features incorporated into Wal-Mart's new "green" store ... create very modest improvements in energy consumption and stormwater runoff," says that it does not change "Wal-Mart's basic business model, which is extremely polluting." The ILSR contends that Wal-Mart's practices increase driving, and that it has a poor record of locating stores on environmentally sensitive sites, especially wetlands.

Employees

Wal-Mart refers to its employees as "associates," and encourages managers to think of themselves as "servant leaders." Each shift at every store, club, and distribution center (theoretically) starts with a store-wide meeting where managers discuss with hourly employees daily sales figures, company news, and goals for the day.

All Wal-Mart stores in the United States have employees referred to as "People Greeters." They welcome people to the store and help prevent shoplifting. At some Sam's Club these employees inspect the contents of the shopping carts of exiting customers.

U.S. Senator Hillary Clinton (Democrat, New York) formerly worked as a lawyer for Wal-Mart and also served on its Board of Directors.

Wal-Mart benefits

According to Wal-Mart proponents, these benefits are offered to employees:

• Health (80/20 co-pay cost varies by plan and health; Wal-Mart pays average of two-thirds of insurance cost.^[3])
• Dental (80/20 co-pay; $1000 per year cap)
• Stock Options (payroll deduction option, 15% match)
• 401k (50% of profit sharing contribution by company, up to 4% of employees' pay)
• Life Insurance (up to $200,000)
• Company Paid Life Insurance (1 year's pay,up to $50,000)
• Accidental Death and Dismemberment (100% employee-paid)
• Short Term Disability (100% employee-paid)
• Long Term Disability
• Prescription Drug Benefit (Begins after one year of enrollment in company health insurance plan)
• 10% Discount (General merchandise only, does not apply to grocery items)
• Stake Holders Bonus (Two parts, one bonus is based on sales where employees receive $200 for each 2% increase, the other part allows one customer accident per $3.5 million in sales, and pays a $500 bonus)
• Sick Pay (Beginning the second day of absence; accrues at approximately one hour per 80 worked)
• Vacation pay (An average of hours worked, begins on second year of employment)
• Personal time pay
• Bereavement Pay (immediate family members)

Employees are eligible for full benefits after six months of full-time employment, two years of peak-time (part-time or seasonal) employment, or 1000 hours worked. Most benefits, including limited health insurance, start at the first day of employment.

About 30% of its 1.6 million employees have some coverage under the insurance plan.^[4])

Financial results

Wal-Mart is now the largest grocery chain in the U.S., with 14 percent of all grocery sales -- nearly twice the sales of Kroger ($95 billion vs. $51 billion). Wal-Mart also does 20 percent of the retail toy business. Sam Walton's family's holdings in Wal-Mart if combined would comprise the nation's largest fortune; at $100 billion combined they are significantly ahead of Bill Gates.

Wal-Mart went public in 1975. Since then its stock has climbed from 5 cents (split adjusted) to a high of $63 in March 2002. Its stock has dropped more than 20% since then, closing under $50 in August 2005.

Different explanations have been offered for this success:

• The company has always paid a great deal of attention to site selection; in the company's early years, Sam Walton would fly over small towns in a private plane to identify prospective locations. The company claims it analyzes potential locations to find those that would support "one and a half" stores.
• Wal-Mart benefits from economies of scale in 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.
• One particular aspect of the economy of scale is the aggregation effect, used in other business such as The Home Depot and Wells Fargo, whereby Wal-Mart sells as many different items as possible. This allows the company to grow revenue over its fixed cost base (more sales out of the same store). This is why Wal-Mart began to sell low margin groceries.
• Information Systems: Wal-Mart helped push the retail industry to adopt UPC codes and bar-code scanning equipment. Also, Wal-Mart's focus on cost reduction has led to its involvement in a standards effort [5] to use RFID-based Electronic Product Codes to lower the costs of supply chain management. As of June 2004, it has announced plans [6] to require the use of the technology among its top 300 suppliers by January 2006.
• Suppliers: A spokesperson for the company told the Wall Street Journal on Nov. 18, 2004 that it imported $15 billion worth of goods from China in the year that ended Jan. 31, 2004. About $7.5 billion were directly imported by Wal-Mart; the other $7.5 came indirectly through suppliers. In the same period net sales reached $256 billion, with $209 billion coming from U.S. operations. U.S. current account imports from China was reported as $152.4 billion during 2003 ([7]). Mainland Chinese media place Wal-Mart as their 8th largest trading partner in front of Russia and the UK on the top-10 list.
• Cost Control: Wal-Mart watches controllable expenses very closely. Hourly employees can be reprimanded or terminated for having unauthorized overtime. Wal-Mart also squeezes out any inefficiencies in the business such as reducing paper used through computerization. Wal-Mart has closed stores as part of its effort to avoid the expense of hiring union workers.

Public relations

In 2005, Wal-Mart officials embarked on a multi-million dollar campaign to counter some of the criticism it receives, through its public relations website as well as through television commercials which depict selected employees that have had a medical emergency that Wal-Mart has sent to the Mayo Clinic, suggesting to the viewer that all or most employees have good benefits.

It was reported in the New York Times on November 1, 2005 that in response to increased criticism and a deteriorating public image the public relations firm Edelman had been retained. Edelman has set up an internal war room, a rapid-response public relations team, staffed with sophisticated political operatives to respond to negative media attention. Operatives hired include Michael K. Deaver who formerly worked on behalf of Ronald Reagan, Leslie Dach who worked on behalf of Bill Clinton, and Robert McAdam who worked on behalf of the Tobacco Institute [8].

Criticism

(disputed — see talk page)

Critics argue that a large portion of Wal-Mart's financial success is due to business practices harmful to employees, the community, the economy, and the environment. Specific areas of controversy include the company's product selection; treatment of suppliers, competitors, and employees; impact on local communities, and effects on world trade and globalization.

Dumping

Five Rivers Electronic Innovations is located in Greeneville, Tenn. It employs more than 700 workers, and is the last American-owned color TV maker in the U.S.

In May 2003, Five Rivers filed an anti-dumping petition in Washington, charging that color television makers in China were illegally dumping their larger-sized color sets in the U.S., thereby threatening to put Five Rivers out of business. The company tracked TV imports from China and found that sales of the Chinese televisions skyrocketed from just over 50,000 sets in 2001 to 1.5 million sets during the first nine months of 2003, and that Wal-Mart was the primary reason for this increase.

In May 2004, the International Trade Committee unanimously agreed that the surge of these imports from China had injured Five Rivers, and then imposed duties averaging about 23 percent on these sets.

Wal-Mart, standing to lose money if Five Rivers was successful, filed a brief in support of the Chinese suppliers during the hearing, since then it has come to the aide of several other Chinese companies found guilty of dumping. [9]

The argument presented by Wal-Mart and the government of China claimed that the makers of these sets were pricing them fairly, and that if American companies cannot compete, that is their own fault.

Use of overseas labor

Like most major retailers, Wal-Mark purchase many goods produced in countries where the cost of labor is less than in the United States and other wealthy industralized nations. Wal-Mart has been criticized for failure to maintain adequate supervision over its foreign suppliers. This lack of supervision has led to incidents where Wal-Mart products have been made using sweatshops or slave labor. Greg Palast reports that Chinese dissident Harry Wu (Wu Hongda) discovered in 1995 that Wal-Mart was contracting for work done by prisoners in Guangdong Province. Wu and Palast argue that numerous items at Wal-Mart are made by the Chinese People's Liberation Army, potentially including some items described as "Made in America".

In Bangladesh, Palast reported that in 1992 teenagers were working in "sweatshops" approximately 80 hours per week, at $0.14 per hour(9.2 Bangladeshi Taki), 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(2.283 Guatemalan Quetzales).^[10]

According to Wal-Mart, as well as many advocates of free trade, comparisons of wage levels between vastly different countries is not a useful way to assess the fairness of a trade policy. The company also asserts that wages paid to overseas workers are comparable to or exceed local prevailing wages. In that case, the company states that the overseas manufacturing jobs it creates are often an improvement in the quality of life for its employees. The company has also asserted that factory jobs with its suppliers are often safer and healthier than local alternatives, which may include prostitution, the drug trade or scavenging.

Some United States observers have criticised the company for buying too much from the People's Republic of China, contributing to the enormous U.S. trade deficit with China. Wal-Mart accounted for $12 billion dollars of the $103 billion dollar US trade deficit in 2002. [11] Critics say this trade helps support China's government, which they describe as oppressive, and helps them fund their military to further threaten Taiwan, and leads to joblessness and poverty in the United States.

Opposition to unions

Wal-Mart is well-known for its resistance to labor union efforts to organize workers in the corporation's stores. The company argues that unionization is unnecessary because the management and workers maintain a positive working relationship without need for outside representation or involvement.

In 1970, Sam Walton fended off an organizing push by the Retail Clerks Union in two small Missouri towns by hiring a professional union buster, John Tate, to lecture workers on the negative aspects of unions. On Tate's advice, he also took steps to convince his workers that the company had their best interests in mind, encouraging them to air concerns with managers and implementing a profit-sharing program. Shortly after this, Wal-Mart hired a consulting firm, Alpha Associates, to develop a union avoidance program. Martin Levitt, the consultant who worked on the program, says that Wal-Mart does "whatever it takes to wear people down and destroy their spirit." Each manager, he says, is taught to take union organizing personally: "Anyone supporting a union is slapping [their] supervisor in the face." [12] Wal-Mart has maintained books to be passed out to its management, describing how to bust a union organizing attempt; one that leaked is titled "Labor Relations and You, at the Wal-Mart distribution center", and was prepared by a professional union buster named Orson Mason. Managers have a policy of calling the police and having union organizers arrested for trespassing in order to have them removed from the premises. [13] The United Food and Commercial Workers (UFCW) asserts that Wal-Mart maintains a phone hotline for managers to call if they suspect union activity.^[14]

Wal-Mart has aggressively resisted unionization efforts brought forth by their employees, in several cases the company was found guilty of violating the National Labor Relations Act, which expressely forbids firing workers sympathetic to a labor union. The company also shows anti-union videos to all new employees.

In 2000, meat cutters in Jacksonville, Texas voted in a union, and Wal-Mart eliminated in-house meat-cutting jobs in favor of prepackaged meats. The UFCW believes that the switch was retaliation for the union vote, but Wal-Mart claims that the change had been planned for years. In June 2003, an National Labor Relations Board judge ordered Wal-Mart to restore the meat department to its prior structure, complete with meat-cutting, and to recognize and bargain with the union over the effects of any change to case-ready meat sales.^[15]

Of the few stores that have successfully organized, at least one (Jonquière in the province of Québec) was closed down within that year, before management had negotiated with the union regarding a contract. Although Wal-Mart denies that the vote in favor of unionization was the motive for this closure, the Quebec Labor Board has ruled that this action was taken to punish workers for excercising their right to organize, and has ordered that Wal-Mart pay the workers appropriate damages. The board will determine the appropriate remedies for the former employees at a later point in time. In a separate ruling, the labor board rejected Wal-Mart's request to turn over the names of all employees who signed up to unionize in some of their other stores.^[16]

Wal-Mart had an illegal section of its anti-handbilling/anti-solicitation policy that said that workers were not allowed to meet with union representatives or receive union literature while they were off-the-clock and in a non-sales area; Wal-Mart amended this policy in an informal settlement with the National Labor Relations Board [17]

Wal-Mart has an anonymous survey given to each one of its employees, called "Grassroots". The UFCW claims that the purpose of this survey is to let Wal-Mart calculate a Union Probability Index number for each facility, that tells them how likely a union is to form there. UFCW representatives also claim that Wal-Mart listens in on store telephone calls and e-mails, looking for signs of unionization, and sends in union busters in order to dissuade employees from unionizing.[18]

In March of 2005, Tom Coughlin was forced to resign from Wal-Mart's board of directors, the company claims that they found evidence of embezzlement by Coughlin, Coughlin claims that the money was used for an anti-union project involving cash bribes paid to employees of the United Food and Commercial Workers union in exchange for a list of names of Wal-Mart employees that had signed union cards; Coughlin also claims the money was unofficially paid to him, by Wal-Mart, as compensation for his anti-union efforts.^[19]

Wages

In many positions, Wal-Mart employees earn less than those performing similar jobs at other stores. As of 2001, according to US federal statistics, the average supermarket employee earned $10.35 per hour, industry-wide; in comparison, stock clerks at Wal-Mart made $8.23 per hour on average. A 2003 wage analysis reported that cashiers, the second most common job at Wal-Mart, earn approximately $7.92 per hour and work an average of 29 hours a week. This brings in annual wages of $11,948, about $1000 less than the United States federal poverty line for a parent and one child.

Wal-Mart founder Sam Walton once argued that his company should be exempt from the minimum wage, and took advantage of an exception in the minimum wage law that, at the time, excluded small businesses from having to pay the minimum wage. While the federal minimum wage in 1962 was $1.50 an hour, Walton regularly paid his employees only 50 to 70 cents per hour.^[20] Former managers have reported that they were judged by upper management based on their ability to keep payroll costs low, and that they sometimes pressured more senior, higher-paid employees to be more productive.http://www.careerjournal.com/salaryhiring/hotissues/20030626-tejada.html

Critics of Wal-Mart have argued that Wal-Mart indirectly incurs costs for federal social service programs, due to the low wages it pays its employees. A report by Democratic Party congressman George Miller argued that a 200-employee Wal-Mart store may indirectly cost federal taxpayers $420,750 to finance free-lunch and health-care programs for children of low-income Wal-Mart employees, tax credits for low-income families, and similar programs.^[21]

Labor laws and working conditions

In January 2004, the New York Times reported on an internal Wal-Mart audit which found “extensive violations of child-labor laws and state regulations requiring time for breaks and meals.” One week of time records from 25,000 employees in July 2000 found 1,371 instances of minors working too late, during school hours, or for too many hours in a day. There were 60,767 missed breaks and 15,705 lost meal times.

The report by US congressman George Miller stated that in ten percent of Wal-Mart's stores, nighttime employees are sometimes locked inside, making them unable to leave. In some cases employees who had sustained injuries requiring medical attention were forced to wait inside the store for hours for a manager to arrive and unlock the door.^[22]

Under an arrangement, disclosed by The New York Times, Wal-Mart will be allowed 15 days to investigate and rectify employee complaints before the Department of Labor conducts any investigation. Upon receiving a complaint about a potential violation of wage and hour laws, DOL’s field offices around the country are now instructed to notify the DOL office in Little Rock, Arkansas, which will then notify Wal-Mart’s headquarters in Bentonville, Arkansas of the complaint. The Department will not launch its own investigation during that time and it remains unclear under what circumstance it would launch an investigation after the 15 day period ends, Representative George Miller (D-California) requested an investigation by the DOL’s Inspector General to determine whether the arrangement represents a sweetheart deal between the Bush Administration and Wal-Mart. [23]

Taxes

Until the mid-1990s, Wal-Mart took out corporate owned life insurance policies on low level employees, such as janitors, cashiers, cart pushers, and stockers. This type of insurance is usually purchased to cover a company against financial loss when an executive or other high ranking employee dies. In this case it is usually known as Key Man Insurance, but the policies that Wal-Mart took out on its rank-and-file workers were derided as "Dead Peasant Insurance" or "Janitor Insurance". Critics charge that the company was trying to profit from the deaths of its employees, and take advantage of a loophole in a tax law which allowed them to deduct the premiums. The practice was stopped in the mid-1990s when the federal government, which had previously called the financing scheme "tax arbitrage," closed the tax loophole and began to pursue Wal-Mart for back taxes. [24]

Allegations of gender discrimination

Wal-Mart is currently facing an $11 billion gender discrimination lawsuit that has been granted class action status by the district court hearing the case.

In 2000, Wal-Mart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Wal-Mart employees in Colorado had worked off-the-clock. These employees, as well as several former managers, have testified that Wal-Mart had an unofficial policy requiring off-the-clock work, to keep the cost of payroll down; as of the time of printing of Wal-Mart's 2005 Annual Report, the company faced 44 wage and hour lawsuits in states including California, Indiana, Minnesota, New Jersey, Oregon, and Washington.

Health insurance memo

On October 26, 2005, the New York Times reported that a Wal-Mart internal memo sent to the firm's board of directors advised trimming over $1 billion in health care expenses by 2011 through measures such as attracting a younger, implicitly healthier work force by offering education benefits. The memo also suggested giving sedentary Wal-Mart staffers, such as cashiers, more physically demanding tasks, such as "cart-gathering", and eliminating full-time positions in favor of hiring part-time employees who would be ineligible for the more expensive health insurance [25] — policy proposals which may violate the Americans with Disabilities Act of 1990.

According to the article, the memo accused Wal-Mart's lower paid employees of abusing emergency room visits, "possibly due to their prior experience with programs such as Medicaid", whereas such visits may actually be due to the reduced ability of uninsured or underinsured people to make timely appointments to see a regular physician. [26]

The memo reportedly also expressed concern that an employee with seniority earns more money, but is not more productive than a new employee.

Critics point to the story as evidence that Wal-Mart purports to be generous with its employee benefits, while in reality the company is working to cut such benefits by reducing the number of full-time and long-term employees and discouraging supposedly unhealthy people from working at Wal-Mart. [27]

Illegal use of undocumented workers

On October 23, 2003, federal agents raided 61 Wal-Mart stores in 21 states. When they left, the agents had arrested 250 nightshift janitors who were undocumented workers. Following the arrests, a grand jury convened to consider charging Wal-Mart executives with labor racketeering crimes for knowingly allowing undocumented workers to work at their stores. The workers themselves were employed by agencies Wal-Mart contracted with for cheap cleaning services. While Wal-Mart executives have tried to lay the blame squarely with the contractors, federal investigators point to wiretapped conversations showing that executives knew the workers were undocumented. Additionally, some of the janitors have filed a class-action lawsuit against Wal-Mart alleging both racketeering and wage-and-hour violations. According to the janitors, Wal-Mart and its contractors failed to pay them overtime totaling, along with other damages, $200,000. One of the plaintiffs told the New York Times that he worked seven days per week for eight months, earning $325 for 60-hour weeks ($5.41 per hour), and that he never received overtime pay. A legal question now being raised is whether these undocumented workers even have the right to sue their employers. This recent raid was not the first time Wal-Mart was caught using undocumented workers. In 1998 and 2001, federal agents arrested 102 undocumented workers at Wal-Mart stores around the country.

Wal-Mart eventually settled the lawsuit the government brought against them, for $11 million.

Workforce diversity

Wal-Mart has received low 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 57% rating in the 2005 edition, a 43% rating in the 2003 and 2004 editions, and a 14% rating in the 2002 edition. [28] [29]

According to data from the Equal Employment Opportunity Commission, Wal-Mart ranks well below its current retailing peers, which have an average of 56% female managers, female employees at Wal-Mart make up 73% of it's workforce, but only one-third of it's management, a percentage that was typical in 1975.

The EEOC has had to file more lawsuits against Wal-Mart for cases of disability discrimination than any other corporation. A top EEOC lawyer told the magazine Business Week, "I have never seen this kind of blatant disregard for the law." [30]

Product controversy

Wal-Mart's product selection is a controversial subject. As a privately-controlled corporation, Wal-Mart retains the right to control what products are sold in its stores, but many accuse the company of allowing right wing, conservative and religious viewpoints to influence its product selection and thereby effectively impose their own view of morality onto their customers.

Examples of items that Wal-Mart does not sell are music with explicit lyrics (censored or "clean" versions are offered instead), certain magazines such as Maxim, and emergency contraception pills. Critics point out apparent hypocrisy in that that Wal-Mart sells other controversial items such as rifles and shotguns, R-rated movies, and violent video games — although Wal-Mart did remove the video game Grand Theft Auto: San Andreas from its shelves due to a sexually explicit scene which is accessible by modifying the game's code via a software patch.

Originally, Wal-Mart did not label censored compact discs as being edited, and did not accept returns due to copyright concerns. Only after critics claimed this to be a ploy by Wal-Mart to push the sales of censored products, did Wal-Mart start labeling these discs "EDITED". [31]

Wal-Mart was criticized for selling The Protocols of the Elders of Zion, a fraudulent and anti-Semitic document purporting to describe a plan to achieve Jewish global domination. Wal-Mart sold the book on its website, including a description that suggested it might be genuine; It was withdrawn from sale in September 2004, as a business decision. The document is still available for purchase from many other booksellers, who sell it in the interests of freedom of speech. ^[32]

Supplier relations and predatory pricing

Wal-Mart has been prosecuted for predatory pricing behavior, temporarily lowering prices in order to drive competitors out of business and develop local monopolies. The chain has been found guilty of predatory pricing in lower courts, but those convictions have been overturned on appeal. There are also several ongoing cases alleging predatory pricing. There have been no successful federal or state actions to sanction Wal-Mart for practicing predatory pricing.

Most grocers charge several fees in order to carry a supplier's product. A slotting fee is charged for placing a product on the shelf. In addition to slotting fees, retailers may also charge promotional, advertising and stocking fees. According to an FTC study, the practice is "widespread" in the supermarket industry. According to retailers, fees serve to efficiently allocate scarce retail shelf space, help balance the risk of new product failure between manufacturers and retailers, help manufacturers signal private information about potential success of new products, and serve to widen retail distribution for manufacturers by mitigating retail competition. Vendors charge that slotting fees are a move by the grocery industry to profit at their suppliers' expense. [33] Wal-Mart pays the supplier only for the actual cost of the goods themselves, and the supplier pays no fees to Wal-Mart. ^[34]

In its negotiations with suppliers, Wal-Mart requires that prices go down from year to year. If a vendor does not comply with Wal-Mart's request for reduced prices, they risk having their entire brand removed from Wal-Mart's shelves in favor of a lower-priced competitor or a less expensive store brand. This can put pressure on suppliers to shift jobs to factories in third world countries or reduce the quality of the product. A CEO of one of Wal-Mart's suppliers said that the price Wal-Mart requested from his company for a particular product was so low that he couldn't afford to keep production in America, even if he didn't have to pay his workers anything. [35]

Local community impacts

Community activists often organize campaigns against proposed new store locations, but the effects of Wal-Mart stores on the communities in which they operate is a topic of some controversy.

Critics of Wal-Mart and some academic studies, particularly out of the University of Iowa, claim that Wal-Mart displaces locally-owned stores resulting in the reduction of locally-owned corporate assets and real estate, and the destruction or displacement of higher paying jobs. Other studies, including several recently from the University of Missouri, have claimed that Wal-Mart stores either do not have negative impacts or have been found to positively impact a community by affecting lower prices, increased employment and increased establishment counts.

Wal-Mart claims that their entry into local grocery markets lowers prices, and that this is equivalent to an increase in consumers' real incomes in the local economy. Economists at Global Insight (funded by Wal-Mart) in November 2005 estimated that it lowered the Consumer Price Index 3.1 percent, including a reduction nationwide of food prices by 9.1%. The company increased the US economy's overall productivity by three-quarters of a percent by highly efficient distribution systems and pressure on suppliers to be more efficient. Wal-Mart increased net consumer purchasing power by $118 billion in 2004. The efficiencies created 210,000 jobs that would not otherwise exist, but at the same time reduced take-home pay for all retail workers (including the company’s competitors) by $4.7 billion.

The chain's expansion outside of the United States has been opposed by groups concerned that it would negatively impact local culture. For example, when Wal-Mart opened a Superstore in Teotihuacan, community members protested the opening as being, "like planting the staff of globalization" [36], because of its proximity to cultural landmarks such as the Pyramid of the Moon. Archaeological experts were on hand during construction, and assisted in recovering a Pre-Columbian altar, to make way for the store's parking lot.

Wal-Mart in popular culture

Wal-Mart is satirized in The Simpsons as Sprawl-Mart. In a 2005 episode ("On A Clear Day I Can't See My Sister"), the Springfield Sprawl-Mart carries the sign "Not a parody of Wal-Mart".

The South Park episode "Something Wall-Mart This Way Comes" features Wall-Mart, a thinly veiled version of Wal-Mart. In the episode, a Wall-Mart is built in town and runs all of the local stores out of business. Wall-Mart is seen as a self-aware and independent entity, building itself across the nation to take over everything, and forcing employees and managers to work there against their will. The town, unable to resist shopping there, tries to burn the Wall-Mart down, but the next day a crew comes and rebuilds it. Stan and Kyle eventually destroy the Wall-Mart by killing its heart, a mirror which represents greedy consumerism, which is located in the electronics department.

In King of the Hill, A Wal-Mart like store named Mega-Low Mart starts selling propane, Strickland Propane can't compete with their prices, and Hank loses his job. Hank winds up working in the propane department at Mega Lo Mart. It is eventually burnt down when an inept employee causes a gas leak.[37]

Statistics

Retail operations

Main article: List of assets owned by Wal-Mart Stores, Inc.

Wal-Mart operates 5 major retail formats under 3 retail divisions:

• Wal-Mart Stores USA
  • Wal-Mart Discount Stores — Average 100,000 square feet (9,290 m²) and include a selection of general merchandise, including apparel, electronics, health and beauty aids, toys, sporting goods, and household products.
  • Wal-Mart Supercenter — Average 187,000 square feet (17,400 m²) and combine a standard Wal-Mart Discount Store with a full-line supermarket. (commonly known as big box stores)
  • Wal-Mart Neighborhood Market — Average 43,000 square feet (4,000 m²) and include grocery, pharmacy, and limited general merchandise products.
  • Walmart.com — Online shopping site that offers merchandise different from that in stores. The walmart.com site also offers digital music downloads with digital rights management (DRM) and online photo processing.
• SAM'S CLUB — a membership-only wholesale warehouse club focused mainly on serving small business owners. Clubs average 128,000 square feet (11,891 m²).
• Wal-Mart International — operates various formats internationally, including (but not limited to) SAM'S CLUB, Discount Stores, Supercenters, Supermarkets, and restaurants.

Store counts & revenue

Current store counts and revenue for Fiscal Year Ending January 31, 2005 (revenue amounts in U.S. Dollars):

• Company Total: 5,246 stores (excludes Seiyu operations) (US$285.2 billion)
  • Wal-Mart Stores USA (3,337 stores, excluding Puerto Rico) (US$201.4 billion)
    • Discount Stores: 1,353
    • Supercenters: 1,713
    • Neighborhood Markets: 85
  • SAM'S CLUB (United States): 551 Clubs (US$37.1 billion total)
  • International: 1,587 (US$56.3 billion total)
    • Argentina: 11
    • Brazil: 149
    • Canada: 262
    • China: 43
    • Germany: 91
    • South Korea: 16
    • Mexico: 678
    • Puerto Rico (United States insular area): 54
    • United Kingdom (ASDA): 282

ASDA in the United Kingdom is the largest of the international businesses by sales.

Key employees

Executive Board
S. Robson Walton	Chairman of the Board
H. Lee Scott, Jr.	President, CEO, Director (2004 Compensation: $12,444,790 USD)
Thomas M. Schoewe	CFO (2004 Compensation: $2,681,682 USD)
Non Executive Board
David D. Glass	Chairman of the Executive Committee, Director
James Breyer	Director
Michele Burns	Director
Douglas Daft	Director
Roland Hernandez	Director
John D. Opie	Director
Paul Reason	Director
Jack Shewmaker	Director
Jose Villarreal	Director
Jim Walton	Director
Christopher J. Williams	Director
Linda S. Wolf	Director
Senior Management (non-exhaustive list)
John B. Menzer	Vice Chairman, responsible for all U.S. operations, including Wal-Mart USA, Sam's Club USA, and home office support groups
Michael T. Duke	Vice Chairman, responsible for all International Operations
Eduardo Castro-Wright	EVP and CEO, Wal-Mart Stores USA
Linda M. Dillman	EVP and CIO
Rollin L. Ford	EVP, Logistics and Supply Chain
Lawrence V. Jackson	EVP, People Division (Chief HR Officer)
Charles M. Holley, Jr.	SVP, CAO, Controller
Thomas D. Hyde	EVP, Legal and Corporate Affairs, Corporate Secretary
Eric Zorn	EVP and President, Wal-Mart Realty
C. Douglas McMillon	EVP; President and CEO, SAM'S CLUB USA
Ray Bracy	VP, Corporate Affairs (Interim Director)

References and External Links

See also

• Code Adam, the Wal-Mart child-safety program
• List of assets owned by Wal-Mart Stores, Inc.
• List of Wal-Mart brands
• Sam's Club
• Wal-Mart Neighborhood Market
• Criticism of Wal-Mart

Other

• ASDA
• Retailer
• Supermarket
• Superstore
• Whirl-Mart

External Links

Wal-Mart corporate web sites

• Wal-Mart Stores, Inc. Corporate Site
• Wal-Mart Foundation
• Wal-Mart Public Relations site
• Wal-Mart public relations web page, section regarding Benefits (retreived May 25, 2005)

Articles supporting or explaining Wal-Mart

• Wal-Mart and RFID: A Case Study Wal-Mart's future plans to further reduce costs
• Wal-Mart's China inventory to hit US$18b this year China Daily, November 29, 2004.
• "A distorted lens on Wal-Mart", Bruce Bartlett, Washington Times, November 22, 2004
• "Job Creation or Destruction? Labor-Market Effects of Wal-Mart Expansion" (pdf), Emek Basker, Dept. of Economics, University of Missouri, 2002.
• Should We Admire Wal-Mart? Fortune Magazine, March 8, 2004

Data

• Yahoo! - Wal-Mart Stores, Inc. Company Profile
• WMT: Profile for WAL-MART STORES - Yahoo! Finance
• 2004-04-09 10-K

Blogs

• AlwaysLowPrices.net a blog run by Kevin Brancato
• Wal-Mart Space a blog run by Bobby Gerry which explores Wal-Mart's financial statements

Articles critical of Wal-Mart

• Company for the People Seattle Weekly, December 15 - 21, 2004, Article which contrasts Wal-Mart with employee-friendly Costco.
• Costco's Dilemma: Is Treating Employees Well Unacceptable for a Public Corporation? Wall Street Journal, March 26, 2004 Costco's compensation for its employees with comparison to Wal-Mart
• How Costco Became the Anti-Wal-Mart, New York Times, July 17, 2005
• Reclaim Democracy huge collection of articles, studies and websites on Wal-Mart. The articles largely are critical of Wal-Mart, but Wal-Mart supporters also are represented and the stories cover much of the best reporting and studies from multiple perspectives.

• Reclaim Democracy, Internal Documents of Wal-Mart Including "A Manager's Toolbox to Remaining Union-Free", A standard manual for all Wal-Mart managers.

• UC Berkeley report on the community impact of Wal-Mart's lower wages(pdf)
• "Inside the Leviathan" by Simon Head for The New York Review of Books, December 16, 2004
• "The Wal-Mart You Don't Know", Fast Company, Issue 77, December 2003, Page 68 Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas.
• California Legislators Call for Oversight of Wal-Mart's Health Benefits (Study of Peachcare)
• "Wal-Mart: High Prices for American Workers" file, (PDF February 16, 2004) from the Democratic Staff of the House Committee on Education and the Workforce.
• Up against the Wal-Mart, Business Week, March 13, 2000, Explains union's attempt to unionize Wal-Marts
• In Wal-Mart's America, Washington Post, August 27, 2003. Article argues that the decline of Union Industry jobs and the rise of Wal-Mart is destroying America's middle class.
• Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart(pdf), A Report by the Democratic Staff of the Committee on Education and the Workforce U.S. House of Representatives Representative George Miller, Senior Democrat, February 16, 2004
• Wal-Marts Cost State, Study Says, San Francisco Chronicle, August 3, 2004
• Retaliating first, Wal-Mart in Canada, The Economist, Feb 24th 2005
• Sweet Victory: Maryland Stands Up To Wal-Mart, The Nation, Sunday, April 17, 2005. Maryland's House approved a bill that would require all businesses in the state with more than 10,000 employees to spend at least 8 percent of their payroll on health benefits for workers.

Sites critical of Wal-Mart

• Sprawl Busters, site Al Norman, an activist who helps local "site fights" against big box stores
• Index of numerous studies on Wal-Mart's economic and social impacts from The American Independent Business Alliance.
• Wake-Up Wal-Mart website by the United Food and Commercial Workers
• Wal-Mart Watchlabor union-funded website
• Wal-Mart Wiki Though not strictly critical, this wiki is definitely weighted against Wal-Mart in its current state.
• Wal-Mart Free NYC A group fighting to keep New York City Wal-Mart free.
• The New Rules Project(critiques big box development, not limited to Wal-Mart)
• WalMart Alliance for Reform Now
• i-Walmart.com Not strictly critical, yet contains critic information
• Mentally Incontinent Not strictly critical, but tells of one person's less-than-perfect job experience in a Georgia-located Walmart.

Documentaries

• Store Wars is a PBS special taking a close look at one community's battle over Wal-Mart.
• Frontline: Is Wal-Mart Good for America? (PBS Frontline documentary on the impact of Wal-Mart in the U.S. and China)
• Wal-Mart: The High Cost of Low Price is a documentary to be released in November 2005 by Robert Greenwald, the creator of Outfoxed.
• The Age of Wal-Mart was a 2004 documentary produced by CNBC. Featuring interviews with both Wal-Mart top brass and critics, it won a Pulitzer Prize for television excellence.
• Outrageous Fortunes, BBC Three, aired on 26 April 2004, about the workings of Wal-Mart.

Books about Wal-Mart

Books supporting or explaining Wal-Mart

• Bergdahl, Michael (2004) What I Learned from Sam Walton: How to Compete and Thrive in a Wal-Mart World. ISBN 0471679984
• Lichtenstein, Nelson (2006) Wal-Mart: A Field Guide to America's Largest Company and the World's Largest Employer, New Press. ISBN 1595580352
• Ortega, Bob (1998) In Sam We Trust: The Untold Story of Sam Walton and Wal-Mart, the World's Most Powerful Retailer. ISBN 0812963776
• 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 1591840066
• Slater, Robert (2004) The Wal-Mart Triumph: Inside the World's #1 Company. ISBN 1591840430
• Soderquist, Don (2005) The Wal-Mart Way: The Inside Story of the Success of the World's Largest Company. ISBN 0785261192
• Westerman, Paul (2000) Data Warehousing: Using the Wal-Mart Model. ISBN 155860684X

Books opposed to Wal-Mart

• Bianco, Anthony (2006) The Bully of Bentonville: How the High Cost of Wal-Mart's Everyday Low Prices Is Hurting America. ISBN 0385513569
• Disinformation Company (2005) Wal-Mart: The High Cost of Low Price, Disinformation Company. ISBN 1932857249
• Featherstone, Liza (2004) Selling Women Short: The Landmark Battle for Workers' Rights at Wal-Mart. ISBN 0465023169
• Quinn, Bill (2005) How Wal-Mart Is Destroying America and the World: And What You Can Do about It (3rd edition). ISBN 1580086683

Other Books and References

• Ehrenreich, Barbara (2002) Nickel and Dimed: On (Not) Getting By in America, Owl Books. ISBN 0745318460
• Greg Palast (2002) The Best Democracy Money Can Buy: An Investigative Reporter Exposes the Truth About Globalization, Corporate Cons, and High-Finance Fraudsters, Pluto Press. ISBN 0745318460
• Porter, David (2003) Megamall on the Hudson: Planning, Wal-Mart, and Grassroots Resistance, Not Avail. ISBN 155369855X
• A documentary film, Protocols of Zion (2005), connects the original document to a resurgence of anti-Semitism following the September 11 World Trade Center attacks.

Footnotes

1. ^  The World According to Sam, Gourmet. June, 2005
2. ^  Palast, Greg (2002) The Best Democracy Money Can Buy: An Investigative Reporter Exposes the Truth About Globalization, Corporate Cons, and High-Finance Fraudsters, Pluto Press. ISBN 0745318460, p. 119-120; Chinese Workers Pay for Wal-Mart's Low Prices, Washington Post, February 8, 2004; [Wal-Mart faces sweat-shop lawsuit Wal-Mart faces sweat-shop lawsuit], Financial Times (London), September 14, 2005; Suit Says Wal-Mart Is Lax on Labor Abuses Overseas, New York Times, September 14, 2005; Workers Sue Wal-Mart Over Sweatshop Conditions, Reuters, September 13, 2005, Sweatshop Workers on Four Continents Sue Wal-Mart in California Court, Press Release, September 13, 2005; Human cost behind bargain shopping Dateline hidden camera investigation in Bangladesh, Dateline NBC, June 17, 2005
3. ^  Petty Cash A Wal-Mart Legend's Trail of Deceit Mr. Coughlin Told Others Bogus Expenses Hid Plot Against Unions Retailer Disputes His Claim, Wall Street Journal, April 8, 2005
4. ^  Retaliating first, Wal-Mart in Canada, The Economist, Feb 24th 2005; Ex-Wal-Mart Workers Win Battle Globe and Mail, Rhéal Séguin, September 17, 2005
5. ^  Wal-Mart Butchers Force Anti-Union Retailer to Eat Crow, Labor Research Association July 7, 2003; NLRB Judge Orders Wal-Mart To Bargain With UFCW In Texas Labor News, Wal-Martyrs In These Times, Vol. 24, No. 12, 2000, Wal-Mart Wins a Round In Its Struggle To Keep Unions At Bay Voice of America, 25 February 2005; Rally for union bid, Rocky Mountain News, February 24, 2005
6. ^  Wal-Mart public relations web page, section regarding Benefits (retreived May 25, 2005)
7. ^  A documentary film, Protocols of Zion (2005), connects the original document to a resurgence of anti-Semitism following the September 11 World Trade Center attacks.
8. ^ Everyday Low Wages: The Hidden Price We All Pay For Wal-Mart (pdf), A Report by the Democratic Staff of the Committee on Education and the Workforce U.S. House of Representatives Representative George Miller, Senior Democrat, February 16, 2004; Wal-Marts Cost State, Study Says, San Francisco Chronicle, August 3, 2004
9. ^  Down and Out in Discount America, The Nation, January 3, 2005; Wal-Mart's Welfare Dependency, San Francisco Chronicle by Sally Lieber, November 7, 2003
10. ^ Reclaim Democracy, Internal Documents of Wal-Mart Including "A Manager's Toolbox to Remaining Union-Free", A standard manual for all Wal-Mart managers.
11. ^  See Palast, p. 121; Can't Wal-Mart, a Retail Behemoth, Pay More? The New York Times, May 4, 2005

Wal-Mart Stores, Inc.

Corporate Directors: James Breyer | Michele Burns | Douglas Daft | David Glass | Roland Hernandez | John D. Opie | Paul Reason | Lee Scott | Jack Shewmaker | Jose Villarreal | Jim Walton | S. Robson Walton | Christopher J. Williams | Linda S. Wolf

Assets: Amigo Supermarkets | ASDA | Sam's Club | Wal-Mart Discount Stores | Wal-Mart Neighborhood Markets | Wal-Mart Supercenters | Walmex

Annual Revenue: $288 billion USD (10% FY 2005) | Employees: 1.7 million | Stock Symbol: NYSE: WMT | Website: www.walmartstores.com