Aug 26, 2005

Wal-Mart NewsSource: Various

Union Leaders Fight Wal-Mart

A recent article from the L.A. Times stated that “In Canada, Germany and Japan, unions are using protests, the courts and political pressure to thwart the giant retailer’s [Wal-Mart] expansion.”

The meeting that took place in Chicago last week was a way for international labor leaders to find a means to slow Wal-Mart down in order to protect wages and living conditions of all of its workers the L.A. Times said.

“Wal-Mart, union officials say, represents all that is wrong with the global economy, including sweatshop abuses and the extinction of mom-and-pop businesses,” the article stated.

“Our emphasis is to get Wal-Mart to abide by the rules,” said Jan Furstenborg (quoted in the L.A. Times article), head of the commercial division of Union Network International, a Swiss-based umbrella organization that represents more than 900 skills and services unions around the world. “We want the company to realize they have to change if they want to be part of the global business community.”

Wal-Mart claims that it has helped people around the world by delivering low prices and jobs. But many people are still saying that the retailer is anti-union. “Denying that the company was anti-union, Bryan Miller, a Wal-Mart senior vice president, said the retailer preferred to have ‘a direct relationship with our associates’ without the involvement of a third party. Wal-Mart employs 1.6 million people around the world, the majority of whom are nonunion workers in North America,” the article stated.

However, according to the L.A. Times , “In Quebec, Wal-Mart closed a store after its nearly 200 employees voted to unionize. The retailer said the store was unprofitable.”

Apparently, “Wal-Mart has gone to great lengths to keep its North American facilities free of unions. After butchers at a store in Texas voted to unionize in 2000, the company switched to pre-packaged meat. Unions have filed dozens of complaints against Wal-Mart, a number of which have been upheld by regional or federal labor authorities,” the article stated.

This movement was inspired by U.S. unions, according to the article. “Foreign labor groups are forging coalitions with community activists and environmentalists to spread their anti-Wal-Mart message. Union members helped persuade officials in Vancouver and Campbell River, Canada, to turn down permits for two Wal-Mart stores in July.”

Wal-Mart is continuously insisting that the union campaign has not had a major effect on the company’s image or bottom line. “But over the last year, Chief Executive H. Lee Scott has promoted his company’s side of the story more aggressively. He recently visited Brussels, headquarters of the European Union agency that monitors anti-competition policies. And when the Indian prime minister was in Washington in July, Scott was on his schedule for a ‘get acquainted meeting,'” stated the article.

Wal-Mart Advertises in Vogue

With the tough economic times we are facing right now with the energy crisis looming ahead, Wal-Mart decided to make a move towards advertising to the more upscale shoppers and they started by advertising in Vogue magazine .

According to an article in The Globe and Mail , in the September issue of Vogue Wal-Mart had eight pages of ads that “featured women, including an art professor, a fundraiser and a stay-at-home mom, offering testimonials about Wal-Mart’s apparel, said Elissa Lumley, a Vogue spokeswoman. The ads may have cost about $800,000, according to Vogue’s Web site, and are part of an agreement in which Wal-Mart will buy 68 pages of ads over two years.”

Ever since Target came into play with its designer lines and upscale merchandise for less, Wal-Mart has taken notice of the type of customers that are going into Target stores.

“Wal-Mart has made no bones about being the place small-town America shops,” said Patricia Edwards (in The Globe and Mail article), a Seattle-based money manager with Wentworth Hauser & Violich, which has $5.7 billion in assets including 69,000 Wal-Mart shares. “They’re looking to totally change that, and that’s a tall order.”

“Wal-Mart is moving away from a marketing strategy that emphasized discounts and price cuts, said Julie Lyle, the vice-president of corporate marketing, advertising and administration at the company’s headquarters in Bentonville, Ark. Wal-Mart wants to ‘cut through the clutter’ and reach specific types of customers,” said the article.

Lyle adds to that by saying. “It’s not an image makeover we’re after. We’re very confident that our customers understand that we own the price-value equation. Many times we have what these affluent customers are looking for, but they don’t know it’s there.”