Wal-Mart Stores, Inc. is the world's largest retailer and the largest
company in the United States. In the fiscal year ending January 31, 2001
Wal-Mart had $191 billion dollars in sales. It employs over 1 million people
in the United States at 3,300 stores and operates 4,500 retail units in 10
countries: the United States, Mexico, Puerto Rico, Canada, Argentina,
Brazil, China, Korea, Germany, and the United Kingdom (where it owns the
ASDA chain of supermarkets).
Sam Walton, the founder of Wal-Mart, opened the first Wal-Mart store in
Rogers, Arkansas in 1962. The company is publicly traded at the New York
Stock Exchange under the symbol WMT and has its headquarters in Bentonville, Arkansas.
Wal-Mart operates large discount retail stores selling a broad range of
products such as clothes, consumer electronics, drugs, outdoor equipment,
guns, toys, hardware, CDs and books. Its typical products are basic,
mass-market equipment, rather than premium products stocked at specialist
stores. Wal-Mart also operates Supercenters which include grocery
supermarkets. SAM'S CLUB stores are also owned by Wal-Mart; these are retail
stores open only to customers who pay a membership fee.
Wal-Mart's chief competitors as discount retailers include the Kmart
Corporation and the Target Corporation.
Each Wal-Mart store has an employee, usually an elderly person, known as a
"people greeter", whose primary responsibility is to welcome people to the
store. One Wal-Mart training video encourages employees to think of
themselves not as employees but as "associates" and their superiors as
"servant leaders." The training video You've Picked a Great Place to Work
promotes the "essential feeling of family for which Wal-Mart is so
well-known." Employees start the work day with a gathering and the
Wal-Mart is financially successful by a number of measures. For example,
Wal-Mart is now the #1 grocery chain in the United States, ahead of Kroger,
($95 billion in sales compared to $51 billion in sales). Different
explanations have been offered for this success. Some stress the economies
of scale Wal-Mart brings to manufacturing and logistics; the purchase of
massive quantities of items from its suppliers, combined with a very
efficient stock control system, help make operating costs lower than those
of its competitors. (They are leaders in the field of vendor managed
inventory -- asking large suppliers to oversee stock control for a category
and make recommendations to Walmart buyers. This reduces the overhead of
having a large inventory control and buying department.) Some attribute
Wal-Mart's success to the company's alleged tendency to sustain short-term
losses through short-term aggressive pricing, in order to drive competitors
out of business and increase market power. While such a practice may make
good business sense, many observers find it unsavory; communities often
organize campaigns opposing proposed new Wal-Mart stores.
Criticism of Wal-Mart
Activists in rural communities criticize Wal-Mart, saying it displaces
locally owned stores and results in the community losing potential assets to
the corporate headquarters. This is the same sort of economic issue which
leads to tariffs at the international level. In short, Wal-Mart is viewed as
an absentee landlord.
None of Wal-Mart's stores are unionized and ~33% of the employees are
temporary (2002). The company is the target of persistent unionizing
efforts, but has aggressively and sometimes illegally fought off all
attempts. In 2000, the meat-cutting department of the Wal-Mart superstore in
Jacksonville, Texas voted to unionize; two weeks later, Wal-Mart shut down
all its meat-cutting operations. Wal-Mart's unionized grocery competitors
such as Kroger and Safeway are at a disadvantage, as wages at Wal-Mart are
about 20% less than at comparable companies. There is a high employee
turnover rate; nevertheless many employees express satisfaction with the
status quo. Employee Kathleen Baker submitted a petition from 80 Wal-Mart
employees which requested wage increases, she was then fired for "theft" of
the company typewriter. Walton once argued that his company should be exempt
from the minimum wage.
Wal-Mart is the most often sued corporate entity in the United States. The
legal department of Wal-Mart has a reputation among personal injury lawyers
for extremely aggressive legal tactics, and the corporation has been
sanctioned by several courts for failing to respond properly to plaintiff
Wal-Mart managers have sometimes pressured employees to work "off-the-clock"
after they have worked 40 hours in order that over-time pay may be avoided.
As of 2000, Wal-Mart, like many large American corporations with low-wage
employees, screens potential hires through a drug test, in addition to a
multiple choice personality test, which asks applicants to express their
level of agreement with statements such as "rules have to be followed to the
letter at all times."
Wal-Mart is also criticized for maintaining an atmosphere in which it might
appear that they predominantly carry products "Made in America", however,
journalist Greg Palast reports that ~83% of Wal-Mart products are NOT made
within the United States. Palast also reports that Chinese dissident Hongda
Wu discovered, in 1995, that Wal-Mart was contracting prison slave labor in
Guandong Province. Wu and Palast argue that numerous items at Wal-Mart are
made by the Chinese Peoples' Liberation Army. In Bangladesh, Palast reported
that, in 1992, teenagers were working in "sweatshops" ~80 hours per week, at
$0.14 per hour, for Wal-Mart contractor Beximco. In 1994, Guatemalan Wendy
Diaz reported that, at the age of 13, she had been working for Wal-Mart at
$0.30 per hour.
In 1999, Wal-Mart announced that it would not stock the morning after pill
in its 2,400 pharmacies.
In 2002 and 2003, Wal-Mart decided not to carry certain products, because of
racy content, such as Maxim, FHM and Stuff magazines. However, mens
magazines were not singled out, as they also strategically "covered up"
certain fronts of Redbook, Cosmopolitan and Marie Claire due to alleged
customer complaints. Some music sold in Wal-Mart had obscenities overdubbed
with less offensive lyrics, such as albums from Lauryn Hill and the Fugees.
While some see it as a troubling case of censorship, others view it as
Wal-Mart sticking to the sensibilities of middle America.
Hillary Clinton is a former lawyer for Wal-Mart.