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Wal-Mart Stores, Inc.
Company typeDiscount department store/Public (NYSE: WMT)
IndustryRetail
FoundedUnited States Rogers, Arkansas, USA (1962)
HeadquartersUnited States Bentonville, Arkansas, USA
Key people
Sam Walton (1918–1992), Founder
H. Lee Scott, CEO
S. Robson Walton, Chairman
Tom Schowe, CFO
ProductsDiscount stores, grocery stores, and hypermarkets Optical, Pharmacy, Portrait Studio
RevenueIncrease US$351.1 billion (2007)[1]
20,428,000,000 United States dollar (2022) Edit this on Wikidata
Increase US$11.3 billion (2007)[1]
Total assets252,496,000,000 United States dollar (2021) Edit this on Wikidata
Number of employees
Increase 1.9 million (2007)[1]
Websitewww.walmart.com

Wal-Mart Stores, Inc. (NYSE: WMT) is an American public corporation, currently one of the world's largest corporations (by revenues) according to the 2007 Fortune 500.[2] It was founded by Sam Walton in 1962, incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the world and world's fourth largest utility or commercial employer, only trailing the People's Liberation Army of China, the National Health Service of the United Kingdom, and the Indian Railways. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business. It is also the largest toy seller in the U.S., with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s.

Wal-Mart operates in Mexico as Walmex, in the United Kingdom as ASDA, and in Japan as The Seiyu Co., Ltd. Wholly-owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-Mart's investments outside North America have produced mixed results. In 2006, Wal-Mart sold its retail operations in South Korea and Germany due to sustained losses and a highly competitive market.

Wal-Mart has been the target of criticism from some community groups, women's rights groups, grassroots organizations, and labor unions. Specific criticisms include the company's extensive foreign product sourcing, low rates of employee health insurance enrollment, resistance to union representation, and alleged sexism, among other things.

History

Sam Walton's original Walton's Five and Dime store in Bentonville, Arkansas, now serving as the Wal-Mart Visitor's Center
Main article: History of Wal-Mart

Sam Walton's retailing career began when he accepted a job offer at a JCPenney store in Des Moines, Iowa on June 3, 1940; he remained there for 18 months. In 1945, he met with Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin. Butler Brothers offered him a Ben Franklin store in Newport, Arkansas.[3]

Walton could not come to agreement on the existing store's lease renewal and could not find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." Walton achieved higher sales volume by selling products with slightly smaller markups than most competitors.[4]

On July 2, 1962, Walton opened the first Wal-Mart Discount City store. Within five years, the company expanded to 24 stores across the state of Arkansas and reached $12.6 million in sales.[5] In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.[6]

The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution center in Bentonville, Arkansas. At that time, there were 38 stores operating with 1,500 employees and sales of $44.2 million. The company began trading stock as a publicly-held company on October 1, 1972, and was listed on the New York Stock Exchange shortly thereafter. The first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of $340.3 million.[6]

Wal-Mart continued to grow rapidly during the 1980s, and by its 25th anniversary in 1987, there were 1,198 stores with sales of $15.9 billion and 200,000 associates.[6] This year also marked the completion of the company's satellite network, a $24 million investment linking all operating units of the company with its Bentonville office via two-way voice and data transmission and one-way video communication. At the time, it was the largest private satellite network; it allowed the corporate office to track inventory and sales, and send instant communications to stores.[7] Company founder Sam Walton stepped down as CEO in 1988 and was replaced by David Glass.[8] Walton remained on as Chairman of the Corporate Board of Directors, and the company also restructured its senior management positions, elevating a cadre of executives to positions of greater responsibility.

Also in 1988, the first Wal-Mart Supercenter opened in Washington, Missouri.[9] Wal-Mart expanded its superstore concept during the 1990s, and shortly thereafter surpassed Toys "R" Us in toy sales.[10] The company also opened overseas stores during this period, entering the South American market in 1995 with stores in Argentina and Brazil, and purchasing ASDA in the United Kingdom for $10 billion in 1999.[11] In 1998, Wal-Mart entered the grocery business, introducing the Neighborhood Market concept with three stores in Arkansas.[12] By 2005, estimates indicate that the company controlled approximately 20% of the retail grocery and consumables business.[13]

By 2000, H. Lee Scott became President and CEO of the company, and Wal-Mart's sales increased to $165 billion.[14] In 2002, Wal-Mart was listed for the first time on the Fortune 500 list of the world's largest corporations, with revenues of $219.8 billion and profits of $6.7 billion. The company was subsequently listed at #1 every year after 2002, except for 2006.[2][15]

In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200 facilities around the world—including 3,800 stores in the United States and 2,800 international units—and employed more than 1.6 million associates worldwide. In fact, its U.S. presence had grown so rapidly that there were only small pockets of the country that remained further than 60 miles away from the nearest Wal-Mart.[16] Also in 2005, the company focused on becoming more ecologically-friendly and designed two new experimental stores in McKinney, Texas and Aurora, Colorado which feature wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens.[17]

In March 2006, Wal-Mart sought to appeal to a more affluent demographic. Its supercenter in Plano, Texas is intended to compete against stores that some view as more upscale and appealing, such as Target.[18] The new store features wooden floors, wider aisles, a sushi bar, a coffee/sandwich shop (with free Wi-Fi Internet access), and higher-end items such as microbrew beer, expensive wines, and high-end electronics. The exterior sports the hunter green background behind the Wal-Mart letters, similar to Wal-Mart Neighborhood Markets, instead of the trademark blue.

On September 12, 2007, Wal-Mart introduced new advertising with the slogan, "Save Money Live Better," instead of "Always Low Prices, Always" (which had been its slogan for the past 19 years). Global Insight, which performed the research that supported the ads, found that Wal-Mart's price level reduction resulted in savings for consumers of $287 billion in 2006, which equates to $957 per person or $2,500 per household (up 7.3% from the 2004 savings estimate of $2,329).[19]

Subsidiaries

See also: List of assets owned by Wal-Mart Stores, Inc.

Wal-Mart's operations are comprised primarily of three retailing subsidiaries. Wal-Mart Stores Division U.S., Sam's Club, and Wal-Mart International.[20] Wal-Mart does business under nine different retail formats: supercenters, food and drugs, general merchandise stores, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants.[20]

Wal-Mart Stores Division U.S.

An exterior of a typical Wal-Mart discount department store
An exterior of a typical Wal-Mart Supercenter in Madison Heights, Virginia
An exterior of a Wal-Mart Neighborhood Market in Winter Springs, Florida
File:Sam'sClubStore1.jpg
An exterior of a typical Sam's Club store in Maplewood, Missouri

The Wal-Mart Stores Division U.S. is Wal-Mart's largest business subsidiary, accounting for 67.2% of fiscal 2006 net sales.[20] This segment consists of three traditional retail formats in the United States: discount stores, supercenters, and neighborhood markets. The retail department stores sell a range of non-grocery products, though emphasis is now focused on the supercenters, which include more grocery items. This division also includes Wal-Mart's online retailer, walmart.com. Walmart.com was listed in the Top 500 largest e-retailers guide by Internet Retailer in 2007.[21] On February 6, 2007, the company launched a "beta" version of its new movie download service, mediadownloads.walmart.com, which sells 3,000 films and television episodes from all major studios and television networks.[22]

Wal-Mart Discount Stores

Wal-Mart Discount Stores are a chain of discount department stores that range in size from 100,000 square feet (5,000 m²) to 224,000 square feet (21,000 m²), with an average size of approximately 102,000 square feet (9,500 m²).[20] They carry general merchandise products and a selection of food items. Many of these stores also feature a garden center, a pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and a fast food outlet. Some also have gasoline stations.[23]

The first Wal-Mart store in Rogers, Arkansas in 1963. It has been remodeled and expanded to become a 24-hour Wal-Mart Supercenter. A similar Wal-Mart concept, Discount City, opened in Rogers a year earlier, but was later closed or converted into Discount Stores.[5]

As of May 31, 2007, there were 1,040 Wal-Mart Discount Stores in the United States. The busiest Discount Store in the world is in Rapid City, South Dakota.[24]

Wal-Mart Supercenter

Wal-Mart Supercenters are a chain of hypermarkets that range in size from 98,000 square feet (9,000 m²) to 261,000 square feet (24,000 m²), with an average size of approximately 197,000 square feet (17,000 m²).[20] They carry everything a Wal-Mart Discount Store does, as well as a full-service supermarket (including meat and poultry, baked goods, delicatessen, frozen foods, dairy products, garden produce, and fresh seafood). Many Wal-Mart Supercenters also feature a garden center, pet shop, pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops (such as cellular phone stores, hair and nail salons, video rental stores, family fun centers, local bank branches, and fast food outlets). Some locations also sell gasoline; distributors include Murphy Oil Corporation (whose Wal-Mart stations are branded as "Murphy USA"), Sunoco, Inc. (branded as "Optima"), or Tesoro Corporation ("Mirastar" brand).[23]

The first Supercenter opened in 1988 in Washington, Missouri. A similar Wal-Mart concept, Hypermart USA, opened in Garland, Texas a year earlier. However, all of the Hypermart USA stores were later closed or converted into Supercenters. As of May 31, 2007, there were 2,326 Wal-Mart Supercenters in the United States.[24]

Wal-Mart Neighborhood Market

Main article: Wal-Mart Neighborhood Market

Wal-Mart Neighborhood Markets are a chain of grocery stores that average about 42,000 square feet (3,900 m²).[20] They offer a variety of products, including a full-line of groceries, pharmaceuticals, health and beauty aids, photo developing services, and a limited selection of general merchandise.

The first Neighborhood Market opened in 1998 in Bentonville, Arkansas. As of May 31, 2007, there were 118 Neighborhood Markets in the United States.[24]

Sam's Club

Main article: Sam's Club

Wal-Mart operates Sam's Club, a chain of warehouse clubs that sell groceries and general merchandise, often in large quantities or volume. Sam's Club stores are "membership" stores and most customers subscribe to paid annual memberships. However, non-members can make purchases either by purchasing a one-day membership or paying a surcharge based on the price of the purchase.[25] Some locations also sell gasoline.[23] The first Sam's Club opened in 1983 in Midwest City, Oklahoma.[25]

According to Wal-Mart's 2007 Annual Report, Sam's Club's fiscal 2007 sales were $42 billion, or 12.1% of Wal-Mart's total 2007 sales.[26] As of May 31, 2007, there were 584 Sam's Clubs in the United States.[24]

Wal-Mart International

Wal-Mart store in Mexico City
File:DSCN6362.jpg
Wal-Mart store in Shenzhen, China

Wal-Mart's international operations comprise 2,701 stores in 14 countries outside the United States.[27] According to Wal-Mart's 2006 Annual Report, the International division accounted for approximately 20.1% of fiscal 2006 sales.[20] Wholly-owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the UK. With 1.8 million employees worldwide, the company is the largest private employer in the US and Mexico, and one of the largest private employers in Canada.[28]

Wal-Mart has operated in Canada since its acquisition of the Woolco division of Woolworth Canada, Inc.[29] In 2007, it operates 278 locations employing 70,000 Canadians, with a local home office in Mississauga, Ontario. On November 8, 2006, Wal-Mart Canada's first three Supercenters opened in Ancaster, London, and Aurora, Ontario. As of January 31, 2007, there were six Wal-Mart Supercenters in Canada.[24] As of November 30, 2006, there were six Sam's Clubs in Ontario, located in London, Richmond Hill, Vaughan, Cambridge, Pickering, and Toronto).[24] In December 2006, conversion of a Wal-Mart Discount Store into a Wal-Mart Supercenter began in Lethbridge, Alberta, making it the seventh in Canada and the first in western Canada.

Sales in the fiscal year 2006 for Wal-Mart's UK subsidiary, ASDA (an abbreviation of ASquith and DAiries), were 42.7% of the International segment sales. In contrast to Wal-Mart's US operations, ASDA was originally and remains primarily a grocery chain, but it has a stronger focus on non-foods than most UK supermarket chains (a notable exception is Tesco, UK's largest grocery & non-food retailer). At the end of 2007, ASDA had 340 stores, consisting primarily of ASDA Wal-Mart Supercentres, as well as ASDA Supermarkets, ASDA Living, George High Street and ASDA Essentials stores.[30]

In addition to its wholly-owned international operations, Wal-Mart has joint ventures in China and several majority owned subsidiaries. Wal-Mart's majority owned subsidiary in Mexico is Walmex. In Japan, Wal-Mart owns approximately 53% of The Seiyu Co., Ltd.[31] Additionally, Wal-Mart owns 51% of the Central American Retail Holding Company (CARHCO), which is formed from more than 360 supermarkets and other store formats operating in five Central American countries: Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica.[32]

Wal-Mart's UK subsidiary, ASDA

In 2004, Wal-Mart bought the 116 stores in the Bompreço supermarket chain, which operates in northeastern Brazil. In late 2005, Wal-Mart took control of the Brazilian operations of Sonae Distribution Group through its new subsidiary, WMS Supermercados do Brasil, thus acquiring control of the Nacional and Mercadorama supermarket chains, the leaders in the Rio Grande do Sul and Paraná states, respectively. None of those operations were rebranded. As of August 2006, Wal-Mart operates 71 Bompreço stores, 27 Hiper-Bompreço stores, 15 Balaio stores, and 3 Hiper-Magazines (all originally part of Bompreço). It also runs 19 Wal-Mart Supercenters, 13 Sam's Club stores, and 2 Todo Dia stores. With the acquisition of Bompreço and Sonae, Wal-Mart is currently the third largest supermarket chain in Brazil, behind Carrefour and Pão de Açúcar.[33]

In July 2006, Wal-Mart announced its withdrawal of operations from Germany because of sustained losses in the highly-competitive German market. The stores were sold to the German company METRO AG during Wal-Mart's fiscal third quarter.[34][31]

In November 2006, Wal-Mart announced a joint venture with Bharti Enterprises to open hundreds of retail stores in India. Because foreign corporations are not allowed to directly enter the retail sector in India, Wal-Mart is expected to operate through franchises and handle the wholesale end of the venture.[35] The partnership will involve two joint ventures; Bharti will manage the front end that involves opening retail outlets, while Wal-Mart will take care of the back end, such as cold chains and logistics. On August 6, 2007, the two companies announced they will be starting about 10 to 15 wholesale cash-and-carry stores, each sized 50,000-100,000 square feet (4,600-9,290 m²) and employing about 5,000 people.[36]

Private label brands

Main article: List of Wal-Mart brands

Today, approximately 40% of products sold in Wal-Mart are private label store brands, or products offered by Wal-Mart and produced through subsidized contracts awarded to the lowest bidder.[37] Wal-Mart began offering private label brands in 1991 with the launch of Sam's Choice, a brand of drinks produced by Cott Beverages exclusively for Wal-Mart. Sam's Choice quickly became popular, and by 1993, was cited as #3 on the list of top beverage brands in the United States.[38] Other Wal-Mart brands include Great Value and Equate in the US and Smart Price in the United Kingdom. A 2006 study found that, "While clearly other results in this study point to the success of other retailers, we are struck by the magnitude of mind-share Wal-Mart appears to hold in shoppers' minds when it comes to awareness of private label brands and retailers."[39]

Corporate affairs

Wal-Mart's business model is based on selling a wide variety of general merchandise at, "always low prices."[20] The company refers to its employees as "associates." All Wal-Mart stores in the US and Canada also have designated "greeters", whose general role is to welcome shoppers at the store entrance and play a role in loss prevention.[40]

Unlike many other retailers, Wal-Mart does not charge a slotting fee to suppliers for their products to appear in the store.[41] Alternatively, they focus on selling more popular products and often pressure store managers to drop unpopular products in favor of more popular ones, as well as asking manufacturers to supply more popular products.[41] More than 70% of the goods sold in Wal-Mart are manufactured in China.[42][43]

On September 14, 2006, the company announced that it would be phasing out its layaway program, citing declining use and increased costs.[44] Layaway ceased to be offered on November 19, 2006, and required merchandise pickup by December 8, 2006. Wal-Mart now focuses on alternative payment options, such as increased use of 6- and 12-month, zero-interest financing. The layaway location in most stores is now used for Wal-Mart's Site-To-Store program, which was rolled out in March 2007. This program enables walmart.com customers to purchase goods online with a free shipping option, with goods being shipped to the nearest location for in-store pickup.[45]

Financial

In 2006, Wal-Mart ranked at number 67 of the 100 largest corporations in terms of profitability (profits divided by total revenue), behind retailers Home Depot, Dell, and Target, and ahead of Costco and Kroger.[46] For the fiscal year ending January 31, 2006, Wal-Mart reported net income of $12.178 billion on $344.992 billion of sales revenue (3.5% profit margin).[47] For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for approximately 20.1% of total sales.[20] As of October 11, 2007, net sales for the 35-week period ending October 5, 2007, was $241.8 billion, up 8.7% from the previous year's results.[48]

Governance

Wal-Mart is governed by a fifteen-member Board of Directors, which is elected annually by shareholders. S. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board. H. Lee Scott, the Chief Executive Officer, serves on the board as well. Other members of the board include Aída Álvarez, James Breyer, M. Michele Burns, James I. Cash, Jr., Roger C. Corbett, Douglas N. Daft, David D. Glass, Roland A. Hernandez, Allen I. Questrom, Jack C. Shewmaker, Jim C. Walton, Christopher J. Williams, and Linda S. Wolf.[49]

Notable former members of the board include Hillary Clinton (1985–1992)[50] and Tom Coughlin (2003–2004), who also served as Vice Chairman. Clinton left the board prior to the 1992 U.S. Presidential Election, and Coughlin left the board in December 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart.[51] On August 11, 2006, he was sentenced to 27 months of home confinement, 5 years of probation, and ordered to pay $411,000 in restitution.[52]

Competition

In North America, Wal-Mart's primary competition includes department stores like Kmart, Target, ShopKo, Meijer, or Canada's Zellers, Winners, or Giant Tiger. Competitors of Wal-Mart's Sam's Club division are Costco, and the smaller BJ's Wholesale Club chain operating mainly in the eastern US. Wal-Mart's move into the grocery business in the late 1990s has also positioned it against major supermarket chains in both the United States and Canada. Several smaller retailers, primarily dollar stores, such as Family Dollar and Dollar General, have been able to find a small niche market and compete successfully against Wal-Mart for home consumer sales.[53] In 2004, Wal-Mart responded by testing its own dollar store concept, a subsection of some stores known as "Pennies-n-Cents."[54]

Wal-Mart has faced competition in foreign markets. For example, in Germany, it had captured just 2% of German food sales following its entry into the market in 1997 and had remained "a secondary player" compared to competitor Aldi which boasts 19% share of the German market.[55]

In July 2006, Wal-Mart announced its withdrawal from Germany. Its stores are to be sold to German company METRO AG[34] In May 2006, Wal-Mart withdrew from the South Korean market when it agreed to sell all 16 of its South Korean outlets to Shinsegae, a local retailer, for $882 million who are as of late 2006 re-branding the country's Wal-Marts as E-mart. Wal-Mart had originally entered the South Korean market in 1998.[56] In the UK, Wal-Mart's ASDA subsidiary is the second largest chain after Tesco.[57]

Wal-Mart has struggled to export its brand elsewhere as it rigidly tried to reproduce its model overseas. In China, Wal-Mart hopes to find success by adapting and doing things the Chinese way. For example, Wal-Mart found that Chinese consumers preferred to select their own live fish and seafood. So stores began displaying the meat uncovered, installed fish tanks and live animals for food and sales increased.[58]

In addition, under heavy pressure from the Communist Chinese government, Wal-Mart has accepted a form of organized labor in China. Chinese labor unions do not negotiate contracts but simply pay dues to the communist government "to secure the social order." Moreover, Chinese consumers may be more open to Americana than shoppers in Europe.[59]

Street sign for Wal*Mart Drive near Gordon, Pennsylvania

Customer base

Each week, approximately 100 million customers, or one-third of the US population, visits Wal-Mart's US stores.[60] Wal-Mart customers place low prices as the most important reason for shopping there, reflecting the "Low prices, always" message that Wal-Mart had from 1962 until 2006.[61] The average US Wal-Mart customer's income is below the national average, and analysts have recently estimated that more than one-fifth do not have a bank account, which is double the national rate.[62] A Wal-Mart financial report in 2006 also indicated that Wal-Mart customers are sensitive to higher utility costs and gas prices.[63] A poll prior to the 2004 US Presidential Election indicated that 76% of voters who shopped at Wal-Mart once per week planned to vote for George W. Bush, while only 23% planned to vote for John Kerry.[64] When measured against other similar retailers in the US, frequent Wal-Mart shoppers were rated the most politically conservative.[65]

In 2006, Wal-Mart made steps to expand its US customer base, announcing a modification in its US stores from a, "one-size-fits-all," merchandising strategy to a custom-fitting merchandise assortment designed to, "reflect each of six demographic groups – African-Americans, the affluent, empty-nesters, Hispanics, suburbanites and rural residents."[66] About six months later, the company unveiled a new slogan—"Saving people money so they can live better lives."—to reflect the three main groups into which Wal-Mart categorizes its 200 million customers: "brand aspirationals" (people with low incomes who are obsessed with names like KitchenAid), "price-sensitive affluents" (wealthier shoppers who love deals), and "value-price shoppers" (who like low prices and cannot afford much more).[61] Wal-Mart has also made steps to appeal to more liberal customers, for example, by rejecting the American Family Association's recommendations and carrying the DVD Brokeback Mountain, a love story about two gay cowboys in Wyoming.[67]

Environment

In October of 2005, Wal-mart began their environmental plan to substantially increase energy efficiency. Some of those goals included spending $500 million a year to attain better fuel efficiency in Wal-Mart's truck fleet, reducing greenhouse gases, reducing energy use, and cutting solid waste from US stores. CEO Lee Scott stated that Wal-Mart would ultimately use only renewabl energy sources and produce zero waste.[68] Groups such as Wal-Mart Watch believe that Wal-Mart's new green campaign is just a distraction to cover the blemishes on their environmental and equal wage records. Many violations litter Wal-Mart's environmental past such as air pollution, storm water violations, and improper storage of hazardous materials. In 2004 alone, Wal-Mart was fined for violations of environmental laws in nine states; the total fines number in the millions.[69]

Despite the criticism Wal-Mart has quickly become the biggest seller of organic milk and the biggest buyer of organic cotton in the world and is cutting down packaging and energy costs.[70] Wal-Mart spent nearly a year working with outside consultants to discover the company's total environmental impact and to identify areas where they could improve. They discovered, for instance, that by eliminating excess packaging on their toy line Kid Connection, they could save $2.4 million a year in shipping costs, 3,800 trees, and one million barrels of oil. Because of its size and power, Wal-Mart's eco-initiative is potentially more world-changing than most corporations.[71]

Employee and labor relations

See also: Criticism of Wal-Mart

Labor unions, religious organizations,[72][73] and environmental groups[74] have criticised Wal-Mart with regard to its policies and/or business practices. In particular, several labor unions blame Wal-Mart workers' unwillingness to join their organizations on the company's anti-union stance. Others disapprove of the corporation's extensive foreign product sourcing, treatment of employees and product suppliers, environmental practices, the use of public subsidies, and the impact of stores on the local economies of towns in which they operate.[75][76][77]

In 2005, labor unions created several web pages and front organizations to damage Wal-Mart's public image. These included Wake Up Wal-Mart (United Food and Commercial Workers) and Wal-Mart Watch (Service Employees International Union). By the end of 2005, Wal-Mart launched Working Families for Wal-Mart, an operation managed by Wal-Mart to tell the company's side of the story. Additional efforts to counter criticism included a public relations campaign in 2005, managed through its public relations website,[78] as well as several television commercials. The company retained the public relations firm Edelman to respond to negative media attention,[79] and has started interacting directly with bloggers by sending them news, suggesting topics for postings, and sometimes inviting them to visit its corporate headquarters.[80]

Critics also decry Wal-Mart's employee and workforce relations, low wages, poor working conditions, and inadequate health care. Critics also denounce what they call the company's anti-union policies. Critics claim that Wal-Mart's high turnover rate (approximately 70% of its employees leave within the first year) indicates that workers are dissatisfied with the lack of recognition and inadequate pay.[81]

Jay Nordlinger of National Review argues that Wal-Mart is attacked simply because it is a leader of the Fortune 500 list or the largest employer in America, and a "free-market success story".[82] Penn & Teller devoted an episode of their show to an analysis of Wal-Mart criticism as a social movement. They theorized that despite the noble rhetoric, the real motivation of "Wal-Mart haters" was rooted in human psychology. They suggested that hating Wal-Mart permits a person "to feel better about themselves" for three main reasons: They "don't run a greedy international conglomerate", they aren't Wal-Mart workers considered "low-skilled, minimum wage drones", and they aren't Wal-Mart customers thought of as "toothless, welfare-getting hillbillies".[83]

Diversity

Wal-Mart is currently facing a gender discrimination lawsuit, Dukes v. Wal-Mart Stores, Inc., which alleges that female employees were discriminated against in pay and promotions. In February 2007, the United States Court of Appeals for the Ninth Circuit issued a 2–1 ruling which affirmed a lower court ruling to certify the case as a class-action lawsuit; plaintiffs estimate that approximately 1.6 million women could be included in the suit.[84][85] According to a consultant hired by plaintiffs in a sex discrimination lawsuit,[86][87] in 2001, Wal-Mart's EEOC filings showed that female employees made up 72% of Wal-Mart's workforce, but only 30% of its management (a 15% difference from the population ratio, 4% higher than the rest of the industry). The consultant claims this ratio was typical in 1975.[86][87] On April 3, 2007, Wal-Mart reported that female employees were now 61% of its workforce and 40% of its management.[88]

A similar lawsuit, EEOC (Janice Smith) v. Wal-Mart Stores, Inc., was filed on August 24, 2001. It accuses the retailer of discriminatory hiring practices at its London, Kentucky Distribution Center, dating back to 1995.[89] Mauldin v. Wal-Mart Stores, Inc. charges that the company's denial of health insurance coverage for birth control is unfair to female employees. In 2002, the lawsuit was granted class action status, allowing all female employees after March 2001 to file claims if they were using contraceptives.[90]

Wal-Mart has received improving scores on the Corporate Equality Index, a measure of how companies treat homosexual employees and consumers, published by the Human Rights Campaign. The rating was 65% in the 2006 edition,[91] 57% in 2005, 43% in 2003 and 2004, and 14% in 2002.[92][93] Wal-Mart's 2003 score accompanied an expanded antidiscrimination policy to protect gay and lesbian employees.[94] The 2005 score accompanied a new definition of family that included same-sex partners.[95]

In January 2006, Wal-Mart announced that, "diversity efforts include new groups of minority, female and gay employees that have started meeting at Wal-Mart headquarters in Bentonville to advise the company on marketing and internal promotion. There are seven so-called Business Resource Groups: women, African-Americans, Hispanics, Asians, Native Americans, Gays and Lesbians, and a disabled group."[96]

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External links

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