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.
Secret Meeting Details Confirmed: Wal-Mart Lobbied U.K. Government
Posted by Alex Goldschmidt
Details of a secret meeting between Wal-Mart executives and top officials in the British government came to light today, giving some insight on the back room deals that have helped Wal-Mart expand internationally. Wal-Mart was having trouble breaking in to the U.K. market due to the country’s strict land use policies. Rather than change its approach to retailing, Wal-Mart instead decided to lodge a complaint with the country’s prime minister: four months after this meeting with Tony Blair, Wal-Mart acquired supermarket chain Asda and officially launched an assault on Great Britain.
It wasn’t the first or the last time Wal-Mart opposed Britain’s efforts to keep sprawl in check. This article from the New Rules Project explains that Wal-Mart’s had a hard time employing its U.S. tactics in the United Kingdom:
From the beginning, Wal-Mart has grown in the U.S. by building massive stores that dwarf all of a town’s existing businesses combined and that are spaced relatively close together across a region. This strategy has been enormously successful, enabling Wal-Mart to overwhelm local economies and drown tens of thousands of small businesses in a sea of over-development.
Wal-Mart has had more difficulty employing this tactic in the U.K., because of Planning Policy Statement 6 ("PPS6"), which requires local governments to steer retail development into town centers and to limit such development on the outskirts unless there is a clear need.
Click here to read more about Wal-Mart’s problems expanding internationally, including failed attempts, riots overseas and foreign opposition to the Arkansas retailer.
Click here for the British reaction to Wal-Mart’s entrance on the U.K. retail scene, or click here to visit Asda Watch, Wal-Mart Watch’s U.K. counterpart.
Wal-Mart did lobby Blair over Asda [Telegraph (U.K.)]
Details of a secret Downing Street meeting held between Tony Blair, the then prime minister, and a senior Wal-Mart executive just months before the world’s biggest retailer pounced on Asda have finally been released, some nine years after the £7bn deal was struck.
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Friday Blog Round-Up: Sustaining Sustainability Edition
Posted by Alex Goldschmidt
SUSTAINING THE SUSTAINABILITY HYPE
Lee Scott’s speech to Wal-Mart suppliers on Wednesday stirred up the environmental community, with bloggers and reporters weighing in on the company’s new sustainability initiatives. More talk is not the same as more action, but everyone wanted to talk about the talk, nonetheless.
Wal-Mart set to change the world [BloggingStocks]
Scott’s comments were outside what most companies would be comfortable saying about changing the basic behavior of its customers, but Wat-Mart may be big enough to bring down healthcare costs for hundreds of thousand of people by dropping prices on generic drugs. By making its electronics products more energy efficient Wal-Mart could have an impact on overall electricity use. It does sell enough consumer goods to potentially do that. According to the company, it is even in talks with car-makers to see if its can be of help building and marketing hybrids.
Scott Glee: Wal-Mart CEO outlines lofty green goals [Grist]
The company wants to double its sales of merchandise that help consumers improve home energy efficiency, is in talks with automakers about selling electric or hybrid cars, and could even set up windmills or solar panels in its parking lots to allow customers to recharge with renewable energy. “It’s a good vision,” says Gwen Ruta of green group Environmental Defense. “Now we need to make it a reality.”
Note: Writing on the Wal points out that Scott never actually said the company’s planning to sell hybrid cars. Wal-Mart hasn’t done much to correct this misconception, it seems.
After the jump, more on Wal-Mart’s attempt to “green up” its act, the company raises health care enrollment by 2%! and the magazines now available at your local Wal-Mart store.
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The Early Effects of Wal-Mart’s Move into Pharmacy Benefits Management
Posted by Alex Goldschmidt
Industry leaders remained unruffled at Wal-Mart’s announcement that it plans to expand its pharmacy benefits program. The plan to expand prescription drug coverage for Wal-Mart employees and the employees of Wal-Mart’s supplier companies could mean big losses for other pharmacies, with the stocks of Wal-Mart’s four leading pharmacy competitors trading lower yesterday.
In a plan it labeled a cost-cutting measure, Wal-Mart announced plans to have company suppliers use Wal-Mart pharmacies for their employees’ prescription drugs. Wal-Mart’s expansion into pharmacy benefits is part of the company’s mounting efforts to break into the lucrative health care industry, and it seems that the retailer has decided to use its suppliers’ employees as the lab rats for its experiment.
Wal-Mart Drug-Benefit Move Isn’t Raising Big Alarms [Dow Jones via CNN Money]
Details of Wal-Mart Stores Inc.’s (WMT) plans to start managing employers’ drug benefits have yet to be filled in, and the move doesn’t appear to be rattling the giant discount retailer’s potential competitors and those who follow the pharmacy benefit management industry.
Wal-Mart’s chief executive told 7,000 store managers Wednesday that the company is starting a pilot program to help “select employers...manage how they process and pay prescription claims,” The Wall Street Journal reported. Wal-Mart Chief Executive Lee Scott said the company should be able to save employers $100 million this year by removing unnecessary costs.
Pharmacy benefit managers, or PBMs, contract with employers to handle prescription-drug claims for employees, negotiating discounts with drug stores and rebates with manufacturers. Two stand-alone PBMs - Medco Health Solutions Inc. (MHS) and Express Scripts Inc. (ESRX) - and the retail-PBM combination CVS Caremark Corp. (CVS) lead the industry.
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It’s Getting a Little Outrageous…
Posted by Alex Goldschmidt
Consumerist brings news that Wal-Mart is still selling t-shirts with a Nazi-era graphic more than a year after they were recalled. As the site rightly points out, if Wal-Mart can’t get one t-shirt off its shelves, what does that mean for the millions of recalled toys tainted with lead?
Walmart Nazi Tshirt Watch: Week 62 [Consumerist]
Just when you thought all of the Walmart tshirts bearing the exact replica of an infamous Nazi symbol were recalled, or sold to a discount store and burned, a Walmart in Palmdale, California has them on sale for $3.00 a pop. 62 weeks after Walmart pledged to remove the shirts from its shelves, and 50 weeks after getting a letter from Congress demanding the shirts removal, they’re still out there. If they can’t get rid of a simple tshirt, how good are they at recalling toys, defective merchandise, and dangerous food?
Hillary Clinton Takes Heat for Past Wal-Mart Support
Posted by Alex Goldschmidt
Hillary Clinton has been catching a lot of flack lately for her time on the Wal-Mart Board of Directors, a fact which says more about Wal-Mart than it does Hillary Clinton. While Senator Clinton may or may not have worked to improve the company while she was there, one thing remains clear: when people hear “Wal-Mart” they think of an employee-unfriendly, environmentally-damaging, and socially-irresponsible corporation.
Bill Clinton comes to Hillary’s defense in this video from ABC. In it, the former president highlights Wal-Mart’s “Buy American” campaign. Ironically, since President Clinton’s time in Wal-Mart’s home state of Arkansas, the retailer not only abandoned the Buy American program, it became the single largest importer of Chinese goods in the United States. As the ABC article says on page 2:
“Wal-Mart indulged in unfettered trade with China: forced labor goods, garments improperly labeled ‘Made In USA,’ smuggled goods that violate import quotas with China and even child labor products.”
No matter what side of the political spectrum you’re on, those kind of practices - and the company that typifies them - won’t win any affection with voters.
Bill Clinton Defends Wife’s Work on Wal-Mart Board [ABC News]
When a South Carolina voter asked Bill Clinton about his wife’s six-year stint on Wal-Mart’s board of directors, the former president appeared primed and ready Thursday, ticking off a list of reasons why “it was the right thing for her to do.”
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Wal-Mart Teaches Its Suppliers How to Scrimp on Employee Benefits
Posted by Alex Goldschmidt
Wal-Mart’s advice to its suppliers reminds us of those World War II ads encouraging families to save nylons and tin cans. Except instead of providing equipment for our fighting men and women, Wal-Mart’s advice only goes to serve itself...and its profits.
At a conference in Kansas City, Missouri yesterday, Wal-Mart CEO Lee Scott told representatives from the company’s suppliers that Wal-Mart plans to help them all save money on their employee health plans. That is, Wal-Mart is going to impart its strategy of shoddy health care plans and mediocre company-sponsored services to its supplier companies.
The health care industry is incredibly lucrative, and by telling suppliers to use Wal-Mart’s services for their employees, Wal-Mart is making money on both ends. Not only will the company increase its pharmaceutical sales, it will also force suppliers to cut costs and, of course, to pass those cuts on to Wal-Mart. Progressive? Perhaps. Altruistic? Hardly.
Wal-Mart Targets Pharmacy Benefits [Wall Street Journal]
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Wal-Mart Fails to Add Production, Disposal to Green Equation
Posted by Alex Goldschmidt
On the heels of Wal-Mart’s feel-good sustainability conference comes this story from the Wall Street Journal about the downside of compact fluorescent lightbulbs. The main point: the bulbs contain a ton of mercury, making them not only dangerous to manufacture, but nearly impossible to dispose of as well. Wal-Mart has heralded compact fluorescents as a cornerstone of its sustainability initiatives, but the company either failed or refused to think about the full life of the bulb. This kind of shortsightedness is typical of Wal-Mart’s approach to sustainability: the company consistently shifts focus away from the long term and global costs of big box retailing.
Lightbulbs are not the only place where Wal-Mart faces such challenges. Recent stories about batteries and consumer electronics expose the fact that Wal-Mart does not factor the environmental and human rights cost of production or disposal in to the costs of its products. As long as the product is cheap and can be marketed as “green,” Wal-Mart doesn’t care where it comes from or where it goes. This thinking applies to the company’s expansion practices as well: the company builds a store with skylights and calls it a “green building,” but dozens of acres of greenspace were still bulldozed to build said store.
In line with true sustainability measures, Wal-Mart needs to think about its products with a cradle-to-cradle concept in mind. Until Wal-Mart stops producing cheaply made, disposable products, we can never count the megaretailer among the world’s responsible companies.
The Dark Side Of ‘Green’ Bulbs [Wall Street Journal]
Wal-Mart Makes Bold New Promises, Ignores Old Ones
Posted by Alex Goldschmidt
Lee Scott spoke to company suppliers at a conference in Kansas City, Missouri, yesterday, laying out a number of bold, new initiatives that target environmental efficiency and health care costs. This year, Scott opened the annual meeting to outsiders for the first time, demonstrating Wal-Mart’s desire to be recognized for its progress in social responsibility. Many have noted that criticism of Wal-Mart’s labor and environmental practices - and the resulting damage to the company’s public image - have spurred Wal-Mart to take action on these issues.
In his speech, Scott placed the bulk of the responsibility for environmental and health care change on Wal-Mart’s suppliers. While Wal-Mart continues to take credit for these sustainability initiatives, it’s actually the company’s suppliers that have made the bulk of the changes. Wal-Mart itself has made comparably little progress on changing its unsustainable business model.
Gwen Ruta of Environmental Defense was quoted in the Washington Post urging Wal-Mart to make these promises a reality. “‘It’s a good vision. It really goes to the heart of some of the biggest challenges we face today,’ she said. ‘Now we need to make it a reality.’”
Indeed, that’s one of the biggest problems with Lee Scott’s speech yesterday: talking is not the same as doing. The company has made only incremental steps towards the promises it laid out in 2005, and it continues to evade questions of implementation and quantification for the lofty ideals it set that year. Instead, by diversion and sleight of hand, the company tries to manipulate statistics to redefine its environmental goals. Help hold Wal-Mart to its original environmental promises: go to http://walmartwatch.com/environment to learn more.