Handshake With Sam
While Wal-Mart’s founder, Sam Walton, steered his company’s growth over its first thirty years, he never let anyone forget that with such tremendous success come certain moral responsibilities. He led by example, and he did business with a handshake.
Today’s Wal-Mart has lost Sam’s way. That’s why we’ve proposed a new contract with Wal-Mart’s current leadership—to help Wal-Mart take its place as a responsible business leader for the new century.
Cause and Effect: Cott’s Shares Dive After Wal-Mart Loss
Posted by Alex Goldschmidt
Wal-Mart giveth, and Wal-Mart taketh away. This is one of the best examples in recent months of a company whose fate hangs in the balance because of Wal-Mart. After yesterday’s news that Wal-Mart had decided to dramatically reduce Cott Beverages’ shelf space, the company’s shares went tumbling, plummeting almost 50% in a day and a half. Wal-Mart’s omnipotence in the market place often determines which companies live and which ones die, the price they sell for and even products’ content. Remember this when Wal-Mart denies responsibility for recalled toys or sweatshop factory labor. For Cott employees reading this: don’t worry, you’re in good company.
Cott’s Shares Go Flat As Wal-Mart Mulls Shift [Wall Street Journal]
Cott Corp. may be losing some of its fizz. Shares of the Toronto maker of private-label soda and other drinks have fallen 49% over the past two days after it acknowledged that it could lose a sizable chunk of its sales at its largest customer, Wal-Mart Stores Inc.
The potential loss adds to the difficulties for Cott, which has been struggling amid surging commodity prices, intensified competition in the U.S. beverage market, drooping soft-drink demand, and other problems. On Feb. 8, the company reported a steep fourth-quarter net loss. Cott’s Wal-Mart business represents about 38% of its revenue.
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Wal-Mart’s Green Efforts: Only Skin Deep?
Posted by Alex Goldschmidt
An article from the Northwest Arkansas Morning News takes a closer look at Wal-Mart’s greening efforts, and while the piece stops short of calling the company’s initiatives “greenwashing” per se, it says most of Wal-Mart’s suppliers aren’t really sure what this whole sustainability concept is all about. Most of them are scrambling to stay on the company’s good side, but comprehensive sustainability efforts can take months or years to implement. And while Wal-Mart has been quick to certify some suppliers as “green,” the notation doesn’t have much basis in reality. So you decide: how genuine are Wal-Mart’s sustainability efforts?
Suppliers warned against greenwashing [NW Arkansas Morning News]
Consumers are seeing many products in stores with claims of being green. Compact this, concentrated that. This is green, that is ecofriendly.
Yes, caring about the environment is more popular than ever. Consumers want environmentally friendly products, and businesses want to give it to them.
Everyone wins, right? Not so fast.
The rush to capitalize on a growing interest in going green has presented real problems to suppliers and consumers. From defining what green means to what’s meaningful to consumers, a simple idea can get pretty complex.
And these days, there’s a lot of pressure on suppliers to go back to the drawing board with reduced packaging, innovative new products, elimination of wasteful materials and reductions in energy use at every step along the way.
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Consumerist’s Worst Company in America Contest
Posted by Alex Goldschmidt
Click below to vote in Consumerist’s Worst Company of the Year. Start your office pool on who will win! NOTE: We’d recommend scrolling down to the “W’s.”
Apple: Think(ing) Different (About Censorship)
Posted by Cass Brulott
The so-called underdog of the computer world, Apple, is poised to overtake Wal-Mart in music sales sometime this year.
The NPD Group issued a report Tuesday that said Apple had outpaced Best Buy and Target to become the No. 2 U.S. music retailer. Unless the downward trend in CD sales suddenly reverses, Apple will be No. 1, said Russ Crupnick, the NPD Group’s president of Music.
“Digital sales were up close to 50 percent and CD sales were down 20 percent last year,” Crupnick said. “Even at half that growth rate in digital sales, Apple will in all likelihood catch Wal-Mart this year.”
Anybody in their teens or early 20s is going to ask, “So what else is new?” To them, digital downloads has been part of their lives for years. It’s only natural that a download store emerge as the top seller.
But anybody older is going to remember that it wasn’t too long ago when music buying meant flipping through CD racks at the former retail powerhouses.
Other than destroying the nostalgia of flipping through unorganized CD racks and purchasing an entire CD to get your hands on that one song, Apple’s success is weakening Wal-Mart’s power to censor the music industry.
With its roots in the Southern Christian heartland, Wal-Mart believes that being a “family” store is the key to their mass appeal. They refuse to carry CDs with cover art or lyrics deemed overtly sexual or dealing with topics such as abortion, homosexuality or Satanism. While Wal-Mart is the world’s largest CD retailer, and in some regions the only place in town to purchase music entertainment products represent only a fraction of their business. However, it is a different story for recording artists. Because Wal-Mart reaps about 10 percent of the total domestic music CD sales, most musicians and record companies will agree to create a “sanitized” version specifically for the megastores.
....
[W]hen Sheryl Crow released her self-titled album [in 1996], Wal-Mart objected to the lyric, “Watch our children as they kill each other with a gun they bought at Wal-Mart discount stores.” When Crow would not change the verse, the retailer refused to carry the album. This type of censorship has become so common that it is often regarded as simply another stage of editing. Record labels are now acting preemptively, issuing two versions of the same album for their big name artists. Less well-known bands, however, are forced to offer “sanitized” albums out of the gate.
As music commerce rapidly shifts from physical to virtual stores, Wal-Mart’s interpretation of family values will lose it’s power to prevent their customer base from being exposed to certain viewpoints.
*****
Dear Apple,
Thanks for helping restore my spirit to the music industry.
Sincerely,
The First Amendment.
The Wal-Mart Effect: Cott Beverages Lose Shelf Space at Wal-Mart
Posted by Alex Goldschmidt
Cott beverages, a long-time Wal-Mart supplier which relies on the company for the bulk of its revenue, was informed this week that Wal-Mart will be cutting its orders from the soda maker. While a “bankruptcy watch” might be a bit premature, Cott representatives are saying the impact of Wal-Mart’s decision will be “significant,” to say the least.
Cott shares plunge on lost Wal-Mart business [Globe and Mail (Canada)]
Soft-drink maker Cott Corp. [BCB-T] , which is already battling to turn back a tide of red ink, saw its shares plunge by more than one-third Tuesday as it confirmed it is losing some of its vital Wal-Mart Stores Inc. business.
By midday, the shares had plummeted by $1.40 (U.S.) or 34.5 per cent to a new 52-week low of $2.65 on the New York Stock Exchange, having fallen 91 cents or 18 per cent Monday.
The Toronto company issued a brief statement before the market opened saying it has received a notice from Wal-Mart, its largest customer, that the giant retailer is reducing the amount of shelf space and merchandising support it provides for the private-label carbonated soft drinks, including Sam’s Choice, that it buys from Cott.
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Wal-Mart’s Banks in Mexico Raise Concerns
Posted by Alex Goldschmidt
Wal-Mart de Mexico is going forward with plans for a bank that were overruled here in the U.S. The company’s banking cards’ high interest rates have raised concerns among consumer advocates. But fairness aside, the company’s move is a clear double standard between unbanked customers here and those in Mexico.
Wal-Mart Rolls Out Bank in Mexico [Arkansas Business]
After failing to land a bank charter in the United States, Wal-Mart Stores Inc. took its plan south of the border.
On Nov. 12, Wal-Mart opened the first four branches of Banco Wal-Mart in Mexico. Banco Wal-Mart already has 22 locations and is expected have at least 80 by the end of the year.
Meanwhile, Wal-Mart’s plans to open a bank in the United States appear to be dead.
Earlier this month, the Senate Banking Committee approved a bill that would prevent retailers from owning the sort of limited bank charters that Wal-Mart previously had sought, just as they are prevented from owning commercial banks. The bill now is headed to the full Senate for a vote, but a date hasn’t been set.
If the bank ban passes, Wal-Mart doesn’t appear to mind.
“There are no such plans at this time” to pursue a bank in the United States, Wal-Mart spokesman Kevin Gardner said last week in an e-mail statement to Arkansas Business.
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Tax Avoidance Strategies: Wal-Mart Sues N.Y. Town Over Property Tax Assessment
Posted by Alex Goldschmidt
For every community that hangs its economic hopes on a big box retailer, let LeRay, N.Y., be a lesson. After LeRay assessed the local Wal-Mart supercenter at a taxable value of $13 million, Wal-Mart’s lawyers fired back, claiming the store’s value was less than half that. It’s a blatant attempt on the part of the company to avoid paying the taxes it rightly owes a small community.
This is just one of Wal-Mart’s many tax avoidance schemes (PDF), which it uses to cut expenses. The practice costs communities millions of dollars in lost revenue every year. Now, in addition to potentially losing more than $7 million in revenue, this small New York town is losing money in legal fees and town officials’ time. It’s not something towns would tolerate from smaller retailers, so why should the world’s largest get a free ride?
LeRay, N.Y., facing suit brought by Wal-Mart [Trading Markets]
The town of LeRay is facing a lawsuit by Wal-Mart contesting its assessment of the company’s supercenter on Route 11.
Wal-Mart Real Estate Business Trust and Wal-Mart Stores East LP is challenging its $13 million assessment in state Supreme Court, saying the actual assessment should be less than half that amount, about $5.7 million. The company filed the lawsuit in July.
However, town Assessor Terry L. Buckley argues that his assessment is fair and that the company is trying to get out of paying its share of taxes. “They’re just trying to get by and pay nothing,” he said.
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Wal-Mart Says Major Sourcing from China Will Continue
Posted by Alex Goldschmidt
As China’s currency increases in value, Chinese-made products are being sold for more here in the U.S. Despite the inflation, Wal-Mart is staying loyal to its partner-in-trade and says it will continue to source several billion dollars worth of goods from the country. Until it can find another country with a weak economy, exploitable labor and natural resources for the taking, that is.
Wal-Mart’s Chinese purchases hold at $9B [Associated Press via CNN Money]
Wal-Mart Stores Inc., a major buyer of Chinese-made shoes, toys and other goods, expects procurement in China to hold steady this year at about $9 billion despite a rising exchange rate and product safety concerns, the retailing giant’s vice chairman said Monday.
Chinese suppliers have stayed competitive amid higher inflation and a rise in China’s currency, the yuan, by improving efficiency and product quality, said Michael Duke.
“I wouldn’t see any major variation” in procurement from the 2007 total of $9 billion, Duke told reporters. “China will continue to be a major production portion of direct purchases by Wal-Mart for a long time.”
Duke’s comments were a positive sign for Chinese exporters that have been squeezed by the yuan’s rise against the U.S. dollar, which makes their goods more expensive in the United States. The yuan has risen by 16 percent against the dollar since July 2005, when Beijing ended a direct link between the currencies. Some exporters have been forced to close, while others are trying to switch to more competitive products.