News & Politics - Wal-Mart: Love it or hate it?

mh67511 · 11-22-2004, 01:48 AM

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Rare glimpse into Wal-Mart empire:
How does world's largest private employer do business?
By David Faber

Updated: 9:27 a.m. ET Nov. 11, 2004Wal-Mart—love it or hate it, it is one of the most successful stories in American business, with annual sales this year alone of $270 billion. But where some see Wal-Mart as capitalism at its finest, others see it as a predator, responsible for low wages, suburban sprawl and lost jobs. Wal-Mart Chief Executive Office Lee Scott sat down with CNBC's David Faber and gave him unprecedented access to the United State’s largest retailer and talked about America’s love-hate relationship with the company that is under fire with over 5000 lawsuits. The following is an excerpt from a two-hour documentary on Wal-Mart airing on CNBC.

Inside the biggest managers meeting of the biggest company in the world, Wal-Mart Chief Executive Officer Lee Scott resembles a retail evangelist, rallying his flock.

“This company is about culture and what happens to us is that by doing this two-times a year, the store managers are hearing directly from the people in the company,” he says.

It’s clear Wal-Mart likes to save you money. But Wal-Mart also likes to save itself money. That was an obsession of the company's founder, Sam Walton.

Today, China figures prominently in Wal-Mart’s relentless drive to lower costs. It is the place many suppliers must turn to if they are to meet Wal-Mart's demand for low prices. Critics say this strategy drains jobs from America.

Wal-Mart is America’s biggest importer from China. How does Scott feel about the jobs lost in America as a result?

“Do I think Wal-Mart is responsible? Clearly the answer is no,” he says. “Moving offshore started a long time before we got to be the biggest sales company in the world.”

The world's biggest store is quickly becoming big in the world outside the United States.

With all those stores, Wal-Mart has also become the world's largest private employer. And in the United States, where it has more than 1.2 million workers, the company has come under sharp criticism for things like its employee health plan.

Wal-Mart spends about $3500 per employee on health costs, which seems to be below the national average of $4400 and below that of large corporations.

How would Sam Walton feel about that?

“Part of the reason we have health care costs like we do is it’s one of the few areas in our life where we are not good consumers,” says Scott. “Sam believed that we, as individuals, pay some of that cost so that we would be able to be enlisted to support the efforts to control the costs of healthcare.”

Just for reference, here is a PDF File of the top 100 retailers. Wal-Mart was #1 in 2003 with $258 billion in sales. In contrast, Home Depot was #2 in 2003 with only $65 billion in sales.

SuperDeluxe · 11-22-2004, 02:06 AM

I hate walmart for the simple fact that you have single mothers with a billion kids running and screaming there..the aisles are too narrow.

But the prices are great..its like dealing with the devil

The Happy Psycho · 11-22-2004, 02:42 AM

Yeah, my thoughts exactly. Love their prices, hate going inside.

Clash181 · 11-22-2004, 02:49 AM

I love Wal-Mart but it's like entering the maw of hell. You go inside that building during daylight and by the time you're done looking around and go to get your car you realize you've been in there for two days and you can't find the people you went in with. At least that's how it is for me.

SweetLisaLisa · 11-22-2004, 03:05 AM

Wal-mart is the new world order. Didn't you know?

I actually can't stand wal-mart. There employees always act like they've got something up their butt. It's just not a very pleasant place. Plus, their fresh meat, vegetables, and fruits suck! HEB is my place to shop. HEB is a grocery store in Texas and it's an awesome store.
However, Wal-mart does bring in my low-sodium soups and carries my icebreakers mints so I go there for that.

mh67511 · 11-22-2004, 03:07 AM

I LOVE Super Wal-Mart. Even their everday prices on many grocery items are less than the SALE PRICES at other stores. Honeslty I can't afford to shop anywhere but Super Wal-Mart. Heck even the grocery store that has TWO people working at a time and makes you bag your own groceries is more expensive than Wal-Mart!

I also love going into the store! I am a MANIAC with that shopping cart...seriously if shopping carts were an olympic sport I would totally win! It pisses me off when people carts are in the way but I just bump them with my cart and that gets them moving.

Our Super Wal-Mart is excellent! We have good produce, meat, frozen foods, everything about it is great.

Lovesbitch · 11-22-2004, 03:17 AM

I love Wal-Mart but I'm pretty sure it's run by the devil. Cause those prices are just to low, it's creepy.

Like movies that cost $25 at a normal store at like $11 at wal-mart. It's just...odd.

I'm waiting for the commercil were the devil's standing there and is like "come into wal-mart, were the prices are as low as hell!"

mh67511 · 11-22-2004, 03:25 AM

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Originally posted by Lovesbitch
I'm waiting for the commercil were the devil's standing there and is like "come into wal-mart, were the prices are as low as hell!"

that was GREAT!

Lovesbitch · 11-22-2004, 03:28 AM

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Originally posted by mh67511
that was GREAT!

oh i forgot to mention the part were he's wearing a very tacky shirt in the commercil.

mh67511 · 11-22-2004, 03:43 AM

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Originally posted by Lovesbitch
oh i forgot to mention the part were he's wearing a very tacky shirt in the commercil.

Yeah and a big smiley face button

.

Lovesbitch · 11-22-2004, 03:44 AM

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Originally posted by mh67511
Yeah and a big smiley face button .

And that creepy smilie thing could be flying around cutting off the legs of shoppers who are leaving without buying anything.

mh67511 · 11-22-2004, 04:19 AM

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Originally posted by Lovesbitch
And that creepy smilie thing could be flying around cutting off the legs of shoppers who are leaving without buying anything.

Yep. I like that part too. You should seriously go into marketing.

In Fair Verona · 11-22-2004, 04:36 AM

Dislike it at the moment, though I have to admit it's useful sometime. Didn't they just build a supercenter like right behind a Mayan (or Aztec) temple in Mexico?

Also, they were out of the OC season one box set. Shame on them.

mh67511 · 11-22-2004, 05:11 AM

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Originally posted by In Fair Verona
Dislike it at the moment, though I have to admit it's useful sometime. Didn't they just build a supercenter like right behind a Mayan (or Aztec) temple in Mexico?

Actually I heard about something like that...don't remember the details but it's that's true well...that's just ridiculous. Sigh, I think Wal-Mart is taking over the world. Seriously.

JW77 · 11-22-2004, 05:24 AM

I'm not really a big fan of Walmart.

Anyway, about the Mexico thing...

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Wal-Mart vs. the Pyramids of the Sun and Moon
By LAURA CARLSEN

The showdown is rife with symbolism. Wal-Mart's expansion plans in Mexico have brought about a modern-day clash of passions and principles on the site of one the earth's first great civilizations.

Several months ago Wal-Mart, the world's largest retail chain, quietly began construction on a new store north of Mexico City. To many, it's just another step in the phenomenal takeover of Mexico's retail sector. But to others, it's stepping on the cultural foundations of the country. Excavation for the new store started just several thousand meters from the Pyramids of the Sun and the Moon, the crowning structures of the ancient city of Teotihuacan.

The Teotihuacan empire is thought to have begun as early as 200 B.C. It grew into a thriving city estimated at over 200,000 inhabitants at its peak. Its streets and sacred buildings are a marvel in urban planning, organized geometrically along the Avenue of the Dead and punctuated by the massive pyramids. The placement of each structure is believed to have a cosmological and social significance that researchers are only beginning to decipher.

The dominion of Teotihuacan stretched deep into the heart of Mayan country in Guatemala and throughout present-day Mexico. Its major symbol and guiding principle of governance was the plumed serpent, Quetzalcoatl. The civilization fell in 700 A.D., under circumstances still shrouded in mystery.

Since then, other tribes and civilizations, including the Aztecs and contemporary Mexican society, have claimed the "City of the Gods" as their heritage. The grand-scale human accomplishment it represents and the power of its architectural, historical, and spiritual legacy is central to Mexico's history and culture. Indigenous leaders, New Age seekers, sightseers, and archaeologists make up a steady flow of pilgrimages to the site.

While little is known for certain about the rise and fall of Teotihuacan, much is known about the rise of the Wal-Mart empire. From a store in Rogers, Arkansas founded by the Walton brothers in 1962, the enterprise ballooned into the world's largest company.

Wal-Mart's driving symbol and governing principle is the dollar sign. The company has revolutionized the labor and business world by working cheap and growing big. Labor costs are held down through anti-union policies, the hiring of undocumented workers, alleged discrimination against women and persons with disabilities, and cutbacks in benefits. Prices paid suppliers are driven down by outsourcing competition.

In Mexico, Wal-Mart's conquest of the supermarket sector began by buying up the nation's extensive chain, Aurrerá, beginning in 1992, and from there building new stores across the country. Today, with 657 stores, Mexico is home to more Wal-Marts and their affiliates than any other country outside the United States. Buoyed by $244.5 billion dollars in annual net sales, the chain can afford to make ever deeper incursions into the country's retail sector.

Proponents of pyramid Wal-Mart argue that it will create jobs and serve consumers cheaply-the hallmark of the store's reputation. The chain has already become Mexico's largest private employer, with over 100,000 employees. But recent studies in the United States, where resistance to the megastores has been growing, show that job creation is often job displacement, as Wal-Marts put local stores out of business, leading to net job losses.

Opposition to the store is led by a diverse group of local merchants, artists, actors, academics, and indigenous organizations that protest damage to Mexico's rich cultural heritage. Through ceremonies, hunger strikes, demonstrations, and press coverage the movement to defend the site has kept the conflict in the public eye and heightened the public-opinion costs to the transnational. Opponents have taken their concerns to the Mexican Congress and UNESCO.

Excavation on the site has revealed archaeological relics from the layers of civilizations that have populated Teotihuacan. Wal-Mart construction workers told the national daily, La Jornada, they had orders to hide any pieces they find. The presence of relics often requires that further excavation be carried out painstakingly or halted altogether. These are processes that the booming Wal-Mart clearly has no time for.

Wal-Mart's economic power as an employer and investor, however, is a force to be reckoned with-especially considering Mexico's high unemployment and the chronic need for foreign currency. Mexico State Governor Arturo Montiel had announced an effort to relocate the planned store, but that initiative inexplicably dissolved only days later. Wal-Mart refuses to relocate, claiming it obtained legal permits and has complied with all formal requirements.

The dispute in Teotihuacan today is not a battle between the past and the future. It is a struggle over a nation's right to define itself. For defenders of the site, gathered behind banners that read "Don't ruin our ruins," the pyramids symbolize the nation's cultural heritage - but they also constitute part of contemporary integrity. Mexico in the modern age is still a country that defines itself by legends, and whose collective identity-unlike its neophyte northern neighbor-reaches back thousands of years.

In this context, Wal-Mart is a symbol of the cultural insensitivity of rampant economic integration. Although its actions may be technically legal, in the end it could pay a high price for them.

And if there's anything Wal-Mart hates, it's high prices.

Laura Carlsen is Director of the Americas Program for Interhemispheric Resource Center. She holds a BA in Social Thought and Institutions (1980) from Stanford University and an MA in Latin American Studies (1986) from Stanford. She received a Fulbright Scholarship to study the impact of the Mexican economic crisis on women in 1986 and has since lived in Mexico City.


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