December, 2006

Wal-Mart enters India…gets a $7 billion investment

Wal-Mart gets $7 billion investment
by Brian White

Wal-Mart’s entry into the Indian market will receive a huge lift with the announcement of a $7 billion investment by Bharti.
Bharti is the Indian company that has agreed to partner with the world’s largest retailer to open locations in India where Wal-Mart currently has no retail presence.

Bharti will invest $7 billion by 2010 to ensure that the retail joint venture is setup and started with the resources it needs to be successful right from the start. The two companies will be setting up 200 large supermarket-type stores and hundreds of smaller large-format stores.

Wal-Mart will now cater to an estimated 300 million Indian citizens — a population that has become increasingly affluent and a market that global retailers are eying with jaws wide open. This piece of pie is up for grabs — like China — and when growth slows in the U.S., to other global markets go the retailers.
(Feed taken from

This is Wal-Marts pearl to be able to open a store to India, this only increases Wal-Mart’s imperialistic power. Stores in India will flurish, economy will begin to stagger, local businesses will close, people will rely on Wal-Mart for everything leaving those who broke their backs to create businesses in shambles. Prices will be cheaper than what they are used to paying, but it all goes back to the hidden costs of Wal-Mart, we just hope that the people of India are aware of this before all goes wrong.

What does 2007 hold for Wal-Mart?

What does 2007 hold for Wal-Mart?

2006 was a rough time for Wal-Mart Stores Inc. (NYSE:WMT) in many media respects, as the company missed targets, saw same-store sales growth decline, and saw some lows that had not been reached in a decade. Still, the world’s largest retailer saw growth this year — just not as much as some unrealistic market watchers wanted.

Wal-Mart’s marketing strategy took several hits, a scandal in its advertising department as Wal-Mart dropped its new ad agency. Also Wal-Mart’s attempt to cater to higher-income shoppers and regionalize the products in its stores to cater to local demographics saw little steam (so far). So, what should 2007 bring?

I’m not sure Wal-Mart can ever change its image to what it thinks it can with consumers. The power of branding is too strong, and Wal-Mart’s super-glued brand is “low prices.” Period. Trying to market to shoppers who associate Wal-Mart with low prices (and not anything else) is probably going to prove futile. But, hey, growth has to come from somewhere, right? Perhaps outside of the U.S. — like India and China, where Wal-Mart is moving into with rapid aplomb.

Fulton Mall may be custom made for Wal-Mart

Wal-Mart targets Albee Square … again
By Ariella Cohen
The Brooklyn Papers

Fulton Mall may be custom made for Wal-Mart.

The city is now considering a plan to tear down the aging Gallery shopping center to make way for a soaring mixed-use tower that could accommodate a Wal-Mart, the New York Sun reported last week.

If the deal were completed, Albee Square, as the site is known, would be rebuilt into Fulton Mall’s most ambitious project yet — a glistening tower that would include 800 apartments, 100,000 square feet of office space and a 500,00-square-foot ground-floor perfect for the behemoth of Bentonville, Arkansas.

Wal-Mart has been eyeing a Downtown site for at least two years, including the Albee Square location. The discount chain has been trying to open a store in New York City, but has met strong opposition from organized labor and (less-organized) environmentalists.

Wal-Mart spokesman Philip Serghini declined to comment on the Albee location, but reiterated that the retailer was “actively reviewing potential sites in all five boroughs.”

Albee Square, nestled between busy DeKalb and Flatbush avenues, is attractive to retailers like Wal-Mart thanks to the 100,000 pedestrians who pass by it daily. Right now, the Gallery’s biggest-name tenants are Toys “R” Us and a Forever 21 clothing store.

On a recent Saturday, the low-rise mall hosted far fewer shoppers than Fulton Street’s pedestrian corridor, but sold many of the same discount shoes and heavily marked-down leather goods.

“Buy one leather jacket and get two for free,” barked a hawker at the mall’s entrance. “Sell them on the street and get your money back!”

The Gallery was previously owned by Atlantic Yards developer Bruce Ratner, who sold to to Joe Sitt’s Thor Equities after it failed to attract enough high-dollar tenants. Because it sits on land that is owned by the city, the Economic Development Corporation will help decide what will be built.

Sitt is reportedly trying to flip the site, take his profit, and move on, leaving the city to find a new developer to carry out its big-box, big-tower vision.

At least one Fulton Mall businessman said Wal-Mart would be out of place in Downtown Brooklyn.

“People come here on tour buses when they want to see what real New York is like,” said Leo Gulfam, a former graffiti artist who rents a storefront where he customizes clothing, jewelry and Air Jordan sneakers with everything from Pakistani flags to picture of Tweedy Bird.

“Our people are crazy about bling,” he said. “They aren’t crazy about Wal-Mart.”

Wal-Mart Wins Ruling on Foreign Labor, Sets up Communist Party in China Wal-Mart

Wal-Mart Stores cannot be held liable under United States law for labor conditions at some of its overseas suppliers, a federal judge has ruled.

A complaint filed last year in Los Angeles by the International Labor Rights Fund contended that employees of Wal-Mart suppliers in China, Bangladesh, Indonesia, Swaziland and Nicaragua were forced to work overtime without pay and in some cases were fired because they tried to organize unions. The group sought to represent hundreds of thousands of employees of Wal-Mart’s overseas suppliers. The New York Times Reports here.

International Herald Tribune
Communist Party branch set up at Wal-Mart’s China headquarters
Sunday, December 17, 2006

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Employees at Wal-Mart’s China headquarters have set up a Communist Party branch, the company and party said Monday, amid a campaign to expand the ruling party’s presence in foreign companies.

The move follows the success of China’s state-sanctioned labor body this year in setting up unions at the U.S. retailer’s outlets. Wal-Mart is one of China’s biggest and most prominent foreign employers, with a workforce of 36,000 and 68 stores.

The party branch was set up Friday at Wal-Mart headquarters in the southern city of Shenzhen, according to the party newspaper People’s Daily and a Wal-Mart Stores Inc. spokesman, Jonathan Dong.

“Quite a few of our associates (employees) are party members already, so they have a right to establish branch organizations,” Dong said.

Dong said he didn’t know whether Wal-Mart would have any formal interaction with the branch or whether its establishment would affect operations. Employees who answered the phone at the party’s Shenzhen office and wouldn’t give their names said they had no information on what the branch at the Wal-Mart headquarters would do.

China’s 70 million-member Communist Party and its affiliated All-China Federation of Trade Unions are trying to expand their presence in foreign companies to keep pace with a fast-changing society amid capitalist-style economic reforms.

State industry, their traditional base, has slashed millions of jobs while private companies are creating tens of millions more.

In a bid to stay relevant, the party has begun offering membership to entrepreneurs and others in the new private economy.

The ACFTU, the umbrella body for unions permitted by the government, has announced a target of setting up unions at 60 percent of China’s 150,000 foreign companies by the end of this year.

An ACFTU spokesman, Li Jianmin, said Monday he had no figures on how close the body is to meeting that goal.

The party has not disclosed its own expansion target.

The party branch at Wal-Mart headquarters is the company’s sixth in China, according to Dong.

The first was set up Aug. 12 in the northeastern city of Shenyang. Party officials there said it would not interfere in store management. An official quoted by the state Xinhua News Agency said the Shenyang branch would encourage members to “to play an exemplary role in doing a good job” and to help Wal-Mart grow.

Many foreign companies in China already have party branches, either officially or unofficially.

One of the earliest was at U.S.-based cell phone maker Motorola Inc. in the eastern city of Tianjin. The branch officially was established in 1997, but news accounts say it was set up as early as 1990 and kept secret in order to avoid alarming Motorola management.

Wal-Mart, based in Bentonville, Arkansas, resisted the creation of unions at its Chinese stores for two years before agreeing in August to help the ACFTU organize its workers.

The party and labor expansion campaigns were ordered in March by President Hu Jintao, who also is the party’s general secretary, according to Chinese media.

“Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises,” the order said, according to the newspaper Beijing News.

Legal Challenge to Wal-Mart

The NY Sun reports(Josh Gerstein): Novel Legal Challenge to Wal-Mart

A bid to use the American legal system to hold Wal-Mart accountable for alleged abuses at its suppliers’ factories overseas is faltering after a federal judge indicated he is inclined to dismiss the case.
Judge Andrew Guilford issued a tentative ruling yesterday that would dismiss a wide-ranging lawsuit filed against the retail giant last year on behalf of workers at factories in Bangladesh, China, Indonesia, Nicaragua, and Swaziland.

The suit alleges that the facilities failed to pay minimum wage, forced overtime work on unwilling employees, and blocked workers from organizing unions.

The attorney for the workers, Terry Collingsworth, argued that the foreign workers had no realistic prospect of suing in their own countries. “They don’t have adequate access to courts there,” he said. “This is their sole place to try to be heard.”

This is an extremely interesting and important case in legal and labor history, if the decision continues to look this bleak, Wal-Mart cannot be reprimanded for mistreating workers in other countries. What we cannot grasp is why, Why Wal-Mart even mistreats workers, the 300 plus billion dollar company should be more ethical and responsible and should see no problem with paying their workers a living wage and quality benefits.

The week in Wal-Mart

We wanted to leave SNL skit up in front of the blog because we loved it so much, but here’s an overview in the Week in Wal-Mart…

In Montreal, Wal-Mart has lost a battle in the Quebec Court of Appeal to fight the unionization of its store in Gatineau. Back in the US – Oklahoma, Wal-Mart has just settled a $5.1 million dollar class-action lawsuit brought by the estates of 73 former employees, it turns out Wal-Mart had taken out life insurance policies on its employees, making itself the beneficiary, the families of the employees who passed away were forced to sue in order to recover the life insurance benefits…What a disgusting move by the worlds largest employer.

In a terribly sad story a family in Indianapolis sues Wal-Mart for the death of their 3 year old son. The family of a 3-year-old killed in July when a mirror fell on him at an Indianapolis Wal-Mart store filed a lawsuit charging negligence and seeking unspecified damages. Wal-Mart’s layaway program see’s its last day.

Senior marketing executive Julie Roehm has left Wal-Mart Stores Inc. after less than a year on the job, which then lead to the diminish of Wal-Mart’s new Ad agency after signing a $570 million dollar contract. The New York Times actually wrote a great article on the entire bizzare situation read that here.

Saturday Night Live, Jay Leno Rip Wal-Mart

This weeks Saturday Night Live took a shot at Wal-Mart by airing their idea of a Wal-Mart commercial.

Leno Rips Wal-Mart
Taken from Tonight Show with Jay Leno

“Here’s some bad news. Wal-Mart has reported that its pre-Christmas sales were down in November. Well, thank God that doesn’t affect anything made in America.”

Wal-Mart "Thanks" Workers

Wal-Mart has admitted they owe something to their 1.3 million laborers in the United States. It’s taken years and years and years of protests, mailings, complaints and demonstrations for them to realize this. So how is Wal-Mart planning on thanking the 1.3 million who run their company?? By giving them polo shirts and an additional 10% off on a specific item each week. The program is called “Associates Out in Front” and was leaked to the New York Times by Wake Up Wal-Mart

The program includes several new perks “as a way of saying thank you” to workers, like a special polo shirt after 20 years of service….Employees who last 40 years will receive matching pants with an option to trade in their Polo shirt for a special edition DVD of “Car 54, Where are You?”

Under the program, store managers are to meet each week with 10 employees who sign up to discuss concerns, suggestions and ideas for improving operations. The program also requires regional general managers to conduct monthly town-hall meetings that are open to every worker in the area.

What are Associates saying about the program?

  • Cleo Forward, a 37-year-old support manager at a Wal-Mart in Dallas, said the new program was promising, but that it fell short in recognizing long-time workers who felt unappreciated by the changes. “They are going to spend $15 on a Polo for you after 20 years? Give me a break,” he said. “We would rather they lift the wage caps.”

  • “Many of the associates were very upset,” Mr. Uselton said, a 35-year-old overnight floor cleaner at a Wal-Mart in Tyler, Tex.. “Management is just not listening anymore.” Some Wal-Mart employees said workers might be afraid to speak up because they have seen coworkers retaliated against — for instance, transferred to worse shifts when they voiced their complaints.

It’s yet another weak attempt by Wal-Mart to win back their employee’s, but if you are an employee and you are buying this “Associates Out in Front Program” please ask yourself the same thing Cleo Forward did and many others are…You spend 20 years at a company and their thank you is a $15 Polo shirt made in a sweatshop in Cambodia, sounds like payback to me.

Read the entire New York Times article.