‘Consumer power’ driving Wal-Mart
$100bn annual savings ‘good for America’ says Scott
Wal-Mart and the savings it brings to US consumers are ‘good for America’, insists Lee Scott, chief executive of the world’s biggest retailer.
In the latest salvo in Wal-Mart’s PR offensive Scott said the “negotiating power” of millions of Wal-Mart shoppers has reshaped the retail landscape to create $100bn a year in savings for US consumers.
The company has been fighting back in the face of criticism of its anti-union stance, employment terms, the prices it can demand from suppliers, and the impact it has on other retailers in the communities in which it opens.
Scott criticised leaders of the United Food and Commercial Workers Union (UFCW) and others for spreading confusion about Wal-Mart to advance “financial and political interests”.
His comments came as Wal-Mart employees in the Tire and Lube Express department at Wal-Mart’s Loveland, Colorado store rejected UFCW representation in a secret ballot. The vote marked the union’s second defeat in a month in its campaign to represent Wal-Mart workers
Scott said: “Our critics are framing the debate about Wal-Mart’s role in society in ways that would actually harm the people whose interests they claim to represent. I believe that if you look at the facts with an open mind, you’ll agree that Wal-Mart is good for America.”
[img r]walmartproducts.jpg[/img]Scott said that US consumers save up to $100bn a year because the company can leverage the interests and buying power of the 270m shoppers who used its 3,500-plus US stores last year.
“These savings are a lifeline for millions of middle and lower-income families who live from payday to payday. In effect, it gives them a raise every time they shop with us. Seen another way, Wal-Mart acts as a bargaining agent for these families – achieving on their behalf a power a ‘negotiating power’ they would never have on their own.”
Scott also pointed out that the average wage for Wal-Mart’s 1.2m employess is about $10 an hour, nearly double the federal minimum wage, and insisted the labor-intensive retail industry can never set the pace for wages and benefits within the overall US economy.
He also pointed out that Wal-Mart – which has been criticised for switching billions of dollars in buying to suppliers in China and elsewhere- purchases good from more than 68,000 US suppliers and supports more than 3.5 million supplier jobs. In 2004, the company spent $137.5bn with US suppliers.
[img l]walmartshoes.jpg[/img]Speaking at Los Angeles Town Hall, Scott said: “To be honest, most of us at Wal-Mart have been so busy minding the store that the way our critics have tried to turn us into a political symbol has taken us by surprise.
“It’s also easy, at some level to empathise with our critics’ fears – after all, the economic change Wal-Mart represents creates a handful of losers even as the vast majority of ordinary Americans gain.
“But at the end of the day, when someone builds a better mousetrap, it’s not the American way to deny average folks the chance to use it to improve their lives. The horse and buggy industry wasn’t permitted to crush the car. The candle lobby wasn’t allowed to stop electric lights. Ultimately, that’s what this debate is about.”
The UCFW countered Scott’s criticism in a press release drawing attention to a US Labor Department investigation claiming that Wal-Mart used children for hazardous jobs in its US stores, the fact that the company is being sued for sexual harassment in Florida by the federal government and was cited in Alabama for having the most employees on taxpayer-funded Medicaid health programme.
The UCFW said: “In a ten-day period, Wal-Mart compiled a virtually unmatched public record of abusive, illegal and irresponsible conduct involving women, children and taxpayers.
“These most recent reports come on top of Wal-Mart already facing the largest sex discrimination lawsuit in history, court convictions for forcing employees to work without pay, and government complaints for the illegal firing and intimidation of workers for exercising workplace rights.”
It added: “Despite Scott’s protestations, Wal-Mart is not just a simple retailer. Wal-Mart is the largest single economic force in history. It is the largest private employer in the country, and the largest corporation in the world. Walton family members comprise five of the ten richest people in the world.
“About one percent of the wealth of just one of the Walton richest five would provide affordable health insurance for all Wal-Mart workers in the US. Wal-Mart is about high profits, not low prices.”
