Wal-Mart Supplier P&G to Increase Prices
One of Wal-Mart’s largest suppliers - consumer goods giant Proctor & Gamble - announced today that they will be raising prices as much as 16 percent. Despite Wal-Mart’s recent incentives forcing suppliers to cut back on packaging, P&G cited increasing costs for plastic and paper as one of the main reasons for the price increase. The big question here is: Will Wal-Mart accept the higher prices? The company is notorious for bullying suppliers in to lowering prices, but Proctor & Gamble is so big it might just be able to stand up to the retailer. Who do you think will win this battle? Will Wal-Mart accept P&G’s higher expenses, and if so, what does this mean for Wal-Mart’s purchasing policy? Submit your thoughts in the comments.
Procter & Gamble to Increase Prices as Much as 16% [Bloomberg News]
Procter & Gamble Co., the maker of Tide laundry detergent and Head & Shoulders shampoo, will raise prices as much as 16 percent because of higher costs for plastic, energy and paper.
The increases are the Cincinnati-based company’s steepest in at least 18 months. Procter & Gamble is betting that customers will continue to buy its Gillette shaving cream and Ivory soap rather than switching to store brands with lower prices promoted by Kroger Co. and Wal-Mart Stores Inc.
“Consumers are conditioned to expect that price increases are here to stay, and they are going to see that across the board,’’ said Peter Sorrentino, who helps oversee assets of $16.7 billion at Huntington Asset Advisors. “They will try the store brands, but if the product performance isn’t there, they will switch back.’’ His Cincinnati-based firm owns P&G shares.
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Posted by Alex Goldschmidt on Tuesday, July 08, 2008 | 5 comments | Permalink
Wal-Mart Says its $4 Generics are “True Health Care Reform”
We’d like to take a moment today to applaud two Arkansas state senators for standing up to Wal-Mart. Sen. Percy Malone and Rep. Tracy Pennartz, in a meeting with Wal-Mart’s senior director of health-care policy Joe Quinn, accused the company of “just trying to polish its image” by calling its $4 generics program “real change in health care.” Wal-Mart, long accused of providing stingy benefits for its employees, has been citing its low retail prices as an answer to criticisms of its health care plan.
Rep. Pennartz, for her part, expressed concerns for independent pharmacists across the country, who would face serious difficulties matching Wal-Mart’s low price. Independent businesses are certainly struggling to keep up with Wal-Mart’s pricing, but Pennartz’s concerns reveal a larger point: Wal-Mart’s $4 generics are aren’t an answer to America’s health care problems, they’re a way for Wal-Mart to make more money. Whether that means luring in Medicaid recipients who need cheaper drugs, getting employees to use the company pharmacies for their prescriptions or driving out competing pharmacies, Wal-Mart is only looking out for one thing: itself.
Wal-Mart: Health care revised [Arkansas Democrat-Gazette]
Wal-Mart Stores Inc. officials told home-state lawmakers Monday that the company’s simplified, cheaper prescription-drug program constitutes real change in health care.
In 2006, Wal-Mart began filling prescriptions for certain drugs for $4 for up to a 30-day prescription, a program the company touts as cutting through the complexities of the pharmaceutical industry. Customers can buy more than 350 prescription drugs that way.
“I think our $4 drug program has been the only true healthcare reform in the United States, in that it definitely changed the landscape in terms of health-care delivery,” Joe Quinn, Wal-Mart’s senior director of health-care policy, told Arkansas lawmakers gathered in Rogers.
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Posted by Alex Goldschmidt on Tuesday, July 08, 2008 | 4 comments | Permalink
Wal-Mart ‘Cultivates Local Economies’: Progress or Hype?
Wal-Mart’s announcement last week that it would source $400 million in local produce may provide a positive PR boost for a company that is notorious for its abundance of outsourced products. It is only a small chunk of Wal-Mart’s $53 billion-a-year grocery market (less than 1%), however, leading to the conclusion that the decision to “cultivate local economies” is more hype, rather than actual progress. Wal-Mart’s overall food sourcing practices continue to display over-reliance on imported food, questionable on account of the environmental toll it effects, in addition to safety concerns within the food supply chain. In 2003, the United States Economic Research Service outlined how food imports may pose dangerous risks for consumers:
...the globalization of the food supply could introduce new food safety risks, revive previously controlled risks, and spread contaminated food wider.
Further, Brian White of BloggingStocks finds a correlation between the rise in imported food items and the rise in chemically-riden, salty foods that are so popular, and cheap, in your local Wal-mart:
Wal-Mart seems like the anti-retailer when it comes to local and fresh food items. Indeed, much of the product lines in a typical Wal-Mart location are sourced from outside the U.S. (non-food items). But, do you really know where those processed food items come from too? The ingredients inside many of those items are so loaded with chemicals and salt to make them taste good, but the true ingredients are from non-U.S. origins and are anything but local in origin.
Without a comprehensive commitment towards the goal of sourcing food locally, Wal-Mart will continue to run roughshod over the legitimate environmental and safety concerns associated with an over-reliance on imported food items. Wal-Mart’s commitment to source less than 1% of its grocery supply hardly deserves cheering commendation.
The Wal-Mart Weekly: Venturing into the local food supply chain [BloggingStocks]
Posted by Tony Calero on Tuesday, July 08, 2008 | 0 comments | Permalink
The End of Suburbia
A fascinating 52-minute documentary about the rise and fall of suburbia and the suburban way of life: car-bound, oil-dependent and ever-consuming. It’s a model that Wal-Mart depends on, but as this documentary explains, it’s a model that probably won’t last another 50 years. [Via]
Posted by Alex Goldschmidt on Monday, July 07, 2008 | 0 comments | Permalink
Victory in Moon, PA
In one vote late last week, the town of Moon scored a big 3-2 victory over Wal-Mart and town supervisor/Wal-Mart supporter Frank Sinatra. Yep, you read that right.
There were serious traffic concerns over a new Wal-Mart in Moon, but the defeat was largely due to the nine zoning exceptions that Wal-Mart was demanding the city make - including “reducing the size of a minimum yard setback of 35 feet to 10 feet, and waiving a requirement to build sidewalks on its side of University Boulevard.” It’s always refreshing to see a town stand tall and let Wal-Mart know that it is in fact the town’s residents, and not Bentonville, that decide the building rules.
Al Norman and sprawl busters had a hand in organizing the group “Moon First,” and have as usual done a great job. Congratulations to Sprawlbusters, the Town of Moon and supervisors Marv Eicher, Michael Hopper and James Vitale - who all held strong against a blitz of Wal-Mart flackery and voted “no”. And an extra congrats to all of the residents who endured through an un-air-conditioned 6 1/2 hour meeting which ended at 1:30 A.M.
Sincere condolences to town supervisers Tim McLaughlin and Mr. Sinatra, who were in the pro-Wal-Mart minority. Whaddya say to a happy song for us and a sad song for you?
Moon rejects Wal-Mart’s plan for store [Pittsburgh Tribune-Review]:
Moon supervisors have put the brakes on Wal-Mart’s planned move into their suburb.
In a 3-2 vote early Thursday, supervisors denied the retailer’s preliminary development plan for the West Hills Shopping Center at University Boulevard and Brodhead Road.
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Posted by Eric Bull on Monday, July 07, 2008 | 10 comments | Permalink
Wal-Mart’s Logo Through the Ages
Wal-Mart’s logo has evolved over the company’s 60 year history, but none have been as slick as the company’s newest version. Wal-Mart’s older logos were straightforward and purely functional: all Sam Walton needed was a way to let people know the name of his store. But Wal-Mart’s logo has now become a complicated piece of PR machinery, serving purposes far beyond Sam’s utilitarian signs. Elizabeth Blackwell on The Street says:
For years, Wal-Mart has inspired plenty of emotions, from fear that the behemoth was destroying small towns to anger at the perceived abuse of low-paid associates. What the company is after now is that warm-and-fuzzy feeling that keeps shoppers loyal because they believe in the store’s values and mission.
Wal-Mart is hoping mightily that this new image will make shoppers forget about Wal-Mart’s persistent labor problems, sweatshop allegations, environmental damages and legal issues. The company’s “values and mission” remain low prices at the cost of nearly everything else, but even Wal-Mart is realizing the problems with a race-to-the-bottom corporate image.
Enter our Unofficial Wal-Mart Logo Redesign Contest to create a logo that represents Wal-Mart’s true corporate values. We’ll be announcing the contest winners in the next week or so, so be sure to send in your entries soon. Below, for inspiration, a look back at Wal-Mart’s logos over the years.
Posted by Alex Goldschmidt on Monday, July 07, 2008 | 8 comments | Permalink
‘We’re Going To Quit Breaking The Law’
More of Flagler Video’s treasure trove of Wal-Mart videos have been uncovered by Steve Painter of the Arkansas Democrat-Gazette. Read the whole thing if you have time, but here’s a few of the better excerpts:
Managers mocking a 12 year old boy who was badly burned by an exploding Wal-Mart gas can:
One tape from a meeting features a skit involving gas cans. When the display of cans is scattered by a riding lawn mower, an executive remarks that it’s a good gas can, “It didn’t explode.”
Lee Scott, concerned that Wal-Mart’s bullying of suppliers would attract Congressional action:
“The real danger you hear being talked about Wal-Mart is that Wal-Mart’s purchasing power will become so large that the impact will have a negative impact somehow on the suppliers who deal with Wal-Mart. And that we will dictate terms that are in fact bad for suppliers and anticompetitive in a sense that they won’t be able to do what they need to do for their shareholders or their employees or their other customers.”
Regional Vice President, Larry Williams:
“We’re going to quit breaking the law. The OSHA laws we have, the wage and hour laws that we have, the federal firearms law, were going to quit breaking the law.”
Keep dreamin’ boss.
2 pay bills with Wal-Mart tapes [Arkansas Democrat-Gazette]:
LENEXA, Kan. — In cramped, leased office space bordered by self-storage units in suburban Kansas City, Mo., Mary Lyn Villanueva and Greg Pierce spend their days figuring out how to keep the bills paid.
Not long ago, the company they own, Flagler Productions Inc., was a $ 10 million-a-year audio-video production and showstaging business with nearly 20 employees and one whopping big client: Wal-Mart Stores Inc. of Bentonville.
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Posted by Eric Bull on Monday, July 07, 2008 | 4 comments | Permalink
A Wal-Mart Fourth of July
Feel like celebrating America this weekend? A trip to Wal-Mart isn’t the way to do it. The retailer has been damaging American jobs and American communities for decades, and this Fourth of July isn’t any different.
Exporting Manufacturing Jobs. Jobs that were once the backbone of the American economy have been exported to countries where labor is cheaper and standards are lower. Wal-Mart has played a critical role in this process, using its size and market share to force manufacturers overseas.
Damaging U.S. Communities Wal-Mart makes a lot of promises when it builds a new store. Town councils are often dazzled by the company’s promises of more jobs and increased revenue, but these promises rarely pan out. The retailer drains municipal resources by forcing its employees on state-sponsored health care, getting subsidies from local governments and frequently undercutting its property and income taxes. Read more about Wal-Mart’s impact on communities >>
Devaluing Retail Sector Jobs. Wal-Mart often woos communities with promises of more jobs, but what communities frequently don’t take in to account is the quality of these jobs. Wal-Mart pays bare minimum wages, and even lowers the overall employment rate of an area by shutting down competing businesses. Just last year, Chicago refused Wal-Mart’s request to build a store on the south side of the city, citing the company’s low wages as the reason. Read more about Wal-Mart’s wages and labor policies >>
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Posted by Alex Goldschmidt on Thursday, July 03, 2008 | 27 comments | Permalink
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