Ron Galloway's Wal-Mart Blog

Wal-Mart Rah-ceives Another Bimp

2007-04-10T13:50:00.000-05:00

Appearing on CNN's Lou Dobbs Tonight a year ago, I noted that while Wal-Mart works fine on a logistical level, management "behaves like Inspector Clouseau." Wal-Mart corporate was not amused with me, but it was a prophetic statement.

As revealed by the intrepid Ann Zimmerman at the Wall Street Journal, Wal-Mart has a private group of ex-CIA and NSA spooks housed in a dark "rheum" called the "Bat-Cave" at corporate headquarters in Bentonville. What do these admirable folk do? Are they looking for bimbs? You know, the exploding kind?

No. They started by bugging the phewne conversations of a New York Times reporter they are not fond of. Then they travelled to South America to record audio of some hot minkey love between two employees. Ahh... the old take off all your clothes ploy!

Wal-Mart's crack spook squad sol-ved the problem of annoyed shareholders by drawing up personal profiles on them. Wal-Mart's PR firm told me several months back they knew which reporters I was talking to on the phewne. Uh-oh. I guess now I can't be pehrseuded to ruhn for the Peublic Office.

Pratfall after pratfall has befallen Wal-mart in the last 2 years. If management doesn't stop their Strangelovian paranoia and focus on becoming the corporation they really can be, they will follow the lead of Sears, Kmart and Montgomery Ward to irrelevance.

Millions shop at Wal-Mart because they financially need to. But do they feel good about it? Not anymeur.

Should Wal-Mart Buy Barclays?

2006-12-08T14:08:00.000-05:00

I think most of us realize Wal-Mart is backed up against a wall in its efforts to grow earnings. WMT's net profit margin seems stuck at 3.5%, it has squeezed all the efficiencies it can out of the supply chain, upscaling failed, and their store growth will become more and more difficult as they try and move into urban areas.

It's also clear WMT wants to move into financial services, which is logical. To succeed in financial services you need 2 things, capital and distribution. WMT has capital, and 130 million people per week enter their stores. Ergo, distribution.

Wal-Mart wants to enter US retail banking, but WMT's move into retail banking through an ILC will be stymied by the new Congress, even as they open branch banking in Mexico.

Put aside banking for a minute. What if Wal-Mart was able to offer financial products, in the form of ETFs and mutual funds to the 80% of the American public that visits its store? Since the FDIC is not involved, it might be an easier path of entry for WMT.

Barclays (BCS) is clearly in play, one reason being the incredible success of their iShares, which are being used by more and more by retail and institutional investors as a less expensive means of investing. Bank Of America, with a market cap roughly equivalent to Wal-Mart's, seems interested. Why? Through their branches, Bank Of America has a massive distribution channel to retail investors. Much like...Wal-Mart.

Barclays has a net profit margin of 22%, which would surely aid WMT's pitiable 3.5%. Wal-Mart could spin off the parts of Barclays (investment banking, British branch banking) it didn't want or need and have a wholly new predictable, high margin, revenue stream to grow through their unmatched distribution. With no FDIC hearings.

Admittedly, this is an out of the box idea. But would cutting the costs of investing to millions of retail investors, many of them unbanked, while raising your profit margins utilizing assets and talents you already have, be such a bad idea?

Eduardo Bends A Little At Wal-Mart

2006-11-18T17:05:00.000-05:00

From The AP:

Wal-Mart Stores Inc. has softened its stance on its attendance policy only weeks after the nation's largest private employer implemented changes that made hourly workers more accountable for excessive unexcused absences.

Word is that Eduardo Castro-Wright, head of the stores (and for intents and purposes right now, the company) has resisted pleas from his regional managers to make changes to his, and make no mistake they ARE his, recent employee dictates, which have provided so much ammo to Kofinis & Co.

These employee mandates (wage caps, strange scheduling, the move to part-timers) may have worked at Wal-Mex, but they probably won't fly here.

"Hamfisted" is too kind a word to describe Eduardo's employee policies.

John Edward's Playstation 3

2006-11-18T16:53:00.000-05:00

First, he should have waited till Sunday for the Nintendo Wii.

Second, Wal-Mart released this statement:

"While the rest of America's working families are waiting patiently in line, Sen. Edwards wants to cut to the front," the Wal-Mart statement said."

Anytime you see the phrase "working families" in a Wal-Mart quote, it's being written by Edelman. They were on top of it today.

For once.

When Wal-Mart Doesn't Work (from HuffPo)

2006-11-18T13:44:00.000-05:00

I gave a keynote address last Friday at the University of Connecticut Law School's Wal-Mart Symposium where I began by asserting that Wal-Mart is like the genius kid who lives in your neighborhood who heads into the woods and starts killing frogs.

Wal-Mart has been on a bit of a PR roll lately.
From lowering the prices of generic drugs to cutting prices on toys, they have enacted policies of late that are by and large beneficial. I often tell audiences in talks that Wal-Mart is not a store, it is an I.T. company, and it is their logistical models, not management expertise, that are primarily responsible for the startling efficiencies that drive the stores.

However there is often a disconnect between the propellerhead nerds in Bentonville and the folks that actually work on the floor in the stores. The subtext of my film Why Wal-Mart Works was that it was the common folk at Wal-Mart that make it work, not management or logistics. Last year on CNN's Lou Dobbs broadcast, I stated Wal-Mart's management sometimes acts like Inspector Clouseau. Recently, they proved me right.

Last August, Wal-Mart announced that they would cap wages for certain positions, such as a cashier, at a certain level that could not be exceeded, no matter how long you had worked there. So, for instance if you had been a cashier for 20 years and through annual raises worked your way to making $16/hour, you could be capped at $15/hour forever, with no hope again for a raise. Clearly this is a form of accelerated attrition, in which Wal-Mart hopes to replace those who have worked their way up to $15 with new workers willing to work at a starting wage of $8-10/hour.

Wal-Mart will tell you one reason for this new policy is to encourage long-term workers to move into management positions. This is utterly disingenuous. Let's move you 50 to 100 miles away from home, have you work twice as hard, for 50 cents more per hour. Thank you sir, may I have another? New hires at Wal-Mart are aware going in of these wage caps, so they are fully informed, but the long-term loyal workers have had the rug pulled out from under them by having these caps foisted on them.

Bentonville does not get the fact that a lot of people are perfectly happy cashiering or stocking at Wal-Mart, and that is all they want to do. I believe most people in life are simply trying to make it through the day, do their jobs, think about their kids, and go home. The logistics/accounting magicians at Wal-Mart need to understand that a person is not a forklift, a palette, or a shelving unit. Wal-Mart's long-term employees are their first line of defense in giving the 5000 customers who enter a superstore a good shopping experience, i.e. a more Target/Costco type experience. People are additive to Wal-Mart (and their share price), especially the long-term employees. You can't enter loyalty and experience into a spreadsheet.

I became aware of this issue when a Wal-Mart employee from my film got wage-capped and called me. I frequently get calls from Wal-Mart employees relating their experiences, and have gotten more than a few about this issue, as well as Wal-Mart's sneaky scheduling and their childish directive that all employees call an 800 number to report in sick.

200 Wal-Mart employees in Florida recently staged a walkout. This has never happened before, and if they'll do it in Florida, you can be sure they'll do it in Michigan and California. 3 weeks ago I resigned from the steering committee of Working Families For Wal-Mart over the wage cap issue. Don't get me wrong. I still feel Wal-Mart is a great company and the largest non-governmental resource to the poor in this country. Millions of people need to shop at Wal-Mart.

I just wish Wal-Mart would value their long-term employees as much as they do their shoppers.

Why Context Works

2006-07-19T08:41:00.000-05:00

In an AP article widely circulated today, I am quoted as saying:

At least one steering committee member, filmmaker Ron Galloway, said he would prefer the strategy to focus on the facts of Wal-Mart's case.

"I still think that it is a sub-optimal strategy to personalize all this. I think the facts are in Wal-Mart's favor and that's just not part of the battle I'm interested in joining," Galloway said, referring to the paidcritics.com Web site.

From October 2005 to February 2006 I was the guy in the arena putting forth the case for Wal-Mart in the media, as I promoted "Why Wal-Mart Works." My opponent in this battle was not Robert Greenwald, but rather the unions who wish to swell their ranks from 9 million to 10.4 million by unionizing Wal-Mart, thereby swelling their dues collection by $400 million per year.

For my troubles I received telephone threats, startling email abuse, and lots of nasty remarks about me in the blogosphere (read the comments on my HuffPo columns). I was target A in the personalization wars with the unions.

As a steering committee member of Working Families For Wal-Mart, I am active in, and supportive of all of the goals and initiatives of the organization, whose ranks have swollen to numbers I could not have expected. Part of our mission is to answer the critics of Wal-Mart, who would not be after Wal-Mart if they were not PAID to do so. To criticize a store 130 million people shop at every week, if you are not getting paid to do so, is irrational behavior.

Remember, the people criticizing Wal-Mart are not the ones who NEED to shop there.

I find that when people are made aware that the critics of Wal-Mart are merely union employees, they immediately discount the negative things being said. That's why the anti-Wal-Mart organizations are striking back in anger at being exposed for who they are. THEY made the battle personal. I know. I lived it. It made me tired and cranky. On the bright side, I did lose a lot of weight.

Working Families For Wal-Mart is a new, very large organization whose goals include putting out the positive facts about Wal-Mart that are ignored in the press, as well as answering the paid critics of Wal-Mart. Having done more than most in answering the paid critics of Wal-Mart, for which I received no compensation, I simply prefer now to focus on putting out the positive facts about the company, which in and of themselves defeat the arguments of Wal-Mart's paid critics. To that end "Why Wal-Mart Works Version 2.0" will be released in a few weeks, as well as a companion book "Defending Wal-Mart."

Working Families For Wal-Mart is not Edelman. WFFWM is a collection of individuals who share a common goal in putting out the positive facts about a company that I have found to be indispensible to the lives of millions of families.

Extorting Wal-Mart

2006-07-05T08:09:00.000-05:00

From The Joplin Globe re the Maryland Health Care Act:

You may not like Wal-Mart - indeed, you may even actively dislike the world's largest retailer - but what the state of Maryland is trying to do in forcing the company to either increase spending on employee health care or pay a similar amount in higher taxes is simply, well, unfair and discriminatory.

The law, which was written so that it applies only to Wal-Mart, is nothing less than extortion.

ASDA Union Negotiations

2006-07-03T09:39:00.000-05:00

From LA Times:

Asda Group Ltd., the British division of Wal-Mart Stores Inc., the world's largest retailer, has reached a deal with one of Britain's largest unions that marks the most significant concessions the global retailer has made to organized labor.

"This is a very significant victory for the GMB, and for the unions in general," said Jan Furstenborg, who monitors Wal-Mart's global labor relations for Union Network International, a global union federation.

The new agreement in Britain brings Wal-Mart's approach closer to that of Tesco, which has a broad partnership with the USDAW shop workers union.

Expect some crowing from the usual suspects today.

Halt Global Warming. Stop Making Movies.

2006-04-08T15:42:00.000-05:00

This is off-topic, but somewhat timely...

Global warming has become has become the cause celebre amongst, well, celebrities. What’s the single best way for Hollywood to decrease greenhouse gases? Buy more Prius hybrids? Nope. Stop making movies.

The MPAA reports paid theatrical receipts of $8.99 billion in 2005, at an average ticket price of $6.41. Dividing ticket price into receipts you get 1.4 billion people who attended movies. How did they get to the theatre? For the most part, they drove, let’s say in a average group of 3 to a car. That means that 468,000,000 car trips were made going to the movies. The average passenger car gets about 22 miles to the gallon. Lets assume the average trip to and from the theatre totals 4 miles.

468 million car trips multiplied by 4 miles per trip equals 1.87 billion miles driven getting to the theatre. Divide that 1.87 billion miles by 22 miles to the gallon and you get a total of about 85 million gallons of gas burned by the simple activity of going to the movies. It takes 4.4 million barrels of oil to produce that much gas. My math may not be exact, nor my assumptions correct, but you get the point.

Going to the movies creates a whole lot of greenhouses gases. Shouldn’t Hollywood demand theatrical exhibition be halted in the name of global warming, and distribute films solely on DVD and VOD?

Notably, if Al Gore’s upcoming global warming film grosses $20 million, then 189,000 gallons of gas will be burned into the atmosphere driving to see his movie about, well, gas being burned into the atmosphere.

Wal-Mart Won't Quit Brokeback

2006-04-04T12:26:00.000-05:00

The Huffington Post was gracious enough to print my comments today:

Standing up to protests from a prominent Christian organization, Wal-Mart is not only carrying the DVD of Brokeback Mountain in its over 3,600 American stores, it is featuring ads for the film in the front of its stores. 138 million Americans pass through the front of these stores every week.

According to the L.A. Times, the American Family Association accuses Wal-Mart of pushing a gay agenda and is encouraging its purported 3 million members to boycott the store. So why is Wal-Mart risking alienating part of its red-state base?

Remember, Wal-Mart is a business committed to delivering products its customers want at prices they can afford. BoxOfficeMojo reports Brokeback has grossed $82 million domestically. King Kong has grossed $218 million domestically. King Kong moved 6 million DVD units in its first week of release. We can infer that Brokeback will sell around 2.4 million DVD units initially. Wal-Mart is 40-45% of the domestic retail DVD market, so Wal-Mart will probably sell at a minimum 1 million copies of the Brokeback DVD.

Brokeback Mountain is a movie the public clearly wants to see. Wal-Mart will offer it to them at the lowest price possible. In fact Wal-Mart will offer it at such a low price, many video rental stores will buy their copies from there. Imagine the howls of protest from liberal activists had Wal-Mart decided not to carry the film, even though these activists claim not to shop there. Will the progressive community applaud Wal-Mart's smart business decision to carry and promote the film?

Probably not. Brokeback's director was outsourced from Taiwan.

Name This Stock

2006-03-16T07:45:00.000-05:00

From Market Watch

WASHINGTON (MarketWatch) -- Want to buy a stock that trades at close to its five-year lows despite posting 13% annual earnings-per-share growth over that period? What if the stock also traded at a discount to the market on a price-to-earnings basis? Furthermore, what if Berkshire Hathaway (led by the legendary Warren Buffett) had initiated a sizable position during 2005? And lastly, what if the company stood to benefit greatly from a potential stabilization in energy prices?

Interested now? Look no further than the largest retailer in the world -- Wal-Mart.
We continue to be confounded by the lack of investor interest in one of the largest and most respected (and feared) companies in the world.

New HuffPo post

2006-03-10T11:37:00.000-05:00

The Huffington Post was nice enough to publish this post by me the other day...

Profiles in Courage

2006-03-10T11:32:00.000-05:00

Wal-Mart wants to save their customers' money by processing credit card transactions themselves. Predictably, Congress protests:

WASHINGTON (Reuters) - A group of congressmen on Friday said an industrial bank owned by Wal-Mart, the world's largest retailer, could threaten the stability of the U.S. financial system and drive community banks out of business. (Comment: Blah, blah, Blah.......)

In a highly critical letter to the acting chairman of the Federal Deposit Insurance Corp., obtained by Reuters, a group of more than 30 congressmen asked the bank regulator to reject Wal-Mart's application to open a bank in Utah.

"Wal-Mart's plan, to have its bank process hundreds of billions in transactions for its own stores, could threaten the stability of the nation's payments system," the lawmakers wrote. "Given Wal-Mart's massive scope and international dealings, it is not possible to rule out a financial crisis within the company that could damage the bank and severely disrupt the flow of payments throughout the financial system."

A Good Way To Start The Morning

2006-01-25T10:26:00.000-05:00

The whole "defending Wal-Mart" experience I've been through has been stressful and tiring. But it seems worthwhile when letters like this come in. I've redacted his name and hometown, but his feelings towards Wal-Mart reflect what I 've heard from other associates.

Hello Ron, my name is ****. I am a manager for Walmart in the great state of Maryland. I had to send you a message thanking you for speaking on our behalf. it is so great to see that someone is taking our side as opposed to those others that hate us. They are just trying to make us look bad through lies and deception. I am so glad that the people of the US still believe in us, it helps with someone like you. Walmart has been a great company for me to work for, it will be only 3 years on April 1st, 2006, but they have been great for me. I am 22 and have been a salaried manager for them for over a year. I started my career out in a supercenter in *****, Md. I worked in the automotive section as a stocker. When I was in my interview or a job with walmart they asked me what I wanted to do with them. I told them that I would be management within a year from my hire date. They said that although hard, it was possible. It was almost to the day that I was hired a year later that i was accepted into the management training program. It has been great, I love my job. Just recently I had a snowboarding accident, just after Christmas last year, I shattered my collarbone. My district manager has been talking with me the whole time and checkning up on me to see how I am doing, I have been getting paid my normal wage ever since I had to take a medical leave of absence. I am returning to work on the 30th of January. It will be over a month since i have been there and my job remains. I just wanted to tell you my story, and that you are the kind of people that I look for to help our company. Thank you again.

If You Haven't Yet...

2006-01-20T17:13:00.000-05:00

...then start watching the new Battlestar Galactica. I think you can get this dress at Wal-Mart....

Always Low Health Care Prices

2006-01-17T19:58:00.000-05:00

Last week the Maryland legislature passed a law requiring employers with 10,000 or more employees to spend at least 8% of their payroll on employee health care benefits, or contribute the difference into the state’s Medicaid fund. The bill applies to only one company, Wal-Mart.

This was a clear victory for the promoters of the bill, primarily unions and Wal-Mart Watch. I debated Tracy Sefl of Wal-Mart Watch a couple of times last winter, and she and her organization are nothing if not organized.

The bill does raise an interesting question.

If Wal-Mart, who by its size was the clear and only target of this bill, is forced to pay into a state Medicaid fund, shouldn’t they have some say in how those funds are spent? Might that be a good thing?

No one has ever accused Wal-Mart of being inefficient or having high costs. Most state Medicaid plans are famously guilty on both these points. Wouldn’t it be a good idea to apply Wal-Mart’s vendor negotiation skills and buying power to health care?

I recently had a routine stress test from a cardiologist. 1,200 bucks. If Wal-Mart were negotiating that fee, I bet I would pay half that. Imagine Wal-Mart calling Maryland radiologists to Bentonville, and telling them that if they don’t lower their fees they’ll have all that imaging business routed over the internet to North Carolina, where doctors will read them cheaper. Do you think the Maryland radiologists would cut their fees? You bet they would.

This would not be practical in all areas of medicine, i.e. emergency patients can’t be sent somewhere else. But diagnostic procedures can, and are, a great place to start.

I wonder how pharmaceutical companies would feel about having Wal-Mart negotiate their contracts? Ouch.

What’s done is done. The Maryland bill is law. But Maryland might be advised to take a look at Wal-Mart in a different light as regards health care. Don’t look at them as a money trough. Look at Wal-Mart strengths, and use them as a resource.

Is Lee Scott The Most Powerful Man In Hollywood?

2006-01-16T07:06:00.000-05:00

Musings from yours truly in last week's HuffPo:

It was widely reported last year that Robert Greenwald’s decision to self-finance part of his Wal-Mart movie was prompted in part by the defection of two film industry investors fearful of retribution from Wal-Mart.

Does Wal-Mart carry that much power in the entertainment industry? Yes. Do they use this influence to squelch dissent? Let’s see.

The sale of DVD’s is currently the engine driving the filmed entertainment industry. According to Variety, Pixar’s The Incredibles generated $355 million in home video sales, a figure 35% higher than its theatrical gross. In many instances, theatrical releases serve as little more than trailers for the DVD, which is where the real money is.

It is well-known that Wal-Mart is responsible for between 40-45% of all DVD sales in the U.S. 138 million people pass through their 3,300 stores every week, generating wide exposure and sales for DVDs. Jeffrey Katzenberg makes frequent trips to Bentonville to put on the blue vest and ply his wares. That’s how important they are.

So who makes the decision on what films Wal-Mart carries? In large part, Time Warner Home Video.

As counterintuitive as it sounds, Time Warner Home Video has served as “captain” of the video department for Wal-Mart for several years, providing sales data and DVD buying recommendations to the company, basically rack-jobbing the DVD department. This is not an unusual arrangement. According to Videobusiness magazine, 20th Century Fox Home Video provides the same “captain” services to Target, the #2 retail outlet for DVDs, and may take over that role for Wal-Mart.

Videobusiness states “execs say the role of captain is coveted because it allows the studio to have influence on the strategic direction and growth of the entire industry.”

This is not to say Wal-Mart does not make decisions regarding specific titles. Wal-Mart, or its captain, chose not to carry Mr. Greenwald’s anti-Wal-Mart film, although they offer over 20 of Mr. Greenwald’s other films on their website.

But surely my pro-Wal-Mart film “Why Wal-Mart Works” would be a shoo-in for the Wal-Mart shelves, right? Wrong. They’re not carrying that either.

So should filmmakers fear that by creating or backing certain content, they risk their chances of being carried at Wal-Mart?

Ask Time Warner.

CJR Doesn't Like My Film. Sigh.

2006-01-06T15:14:00.000-05:00

My letter to the editor of the Columbia Journalism Review:

In her January CJR review of my film, "Why Wal-Mart Works," crusading anti-WalMart scribe Liza Featherstone accuses my film of being "ideologically extreme." Coming from a contributor to Robert Greenwald's famously neutral Wal-Mart film, I suppose that's to be expected. She then accuses me of "verging on dishonesty," which coming from a contributor to a film (Greenwald's) whose first 20 minutes she admits are factually inaccurate, is hypocritical. My film is "amateurish," as though a film (Greenwald's) whose first 20 minutes were not fact-checked, is not. Ms. Featherstone misses the point that my film is an op-ed piece, as is Mr. Greenwald's. That is evident in both the films' titles.

Mr. Featherstone gives her elitist little heart away when criticizing my choice of a poor African-American mother of seven as an interview subject, by lumping her into an imaginary category of Wal-Mart employees who have "few needs and low expectations." A single mother of seven has few needs? How can Ms. Featherstone speak to this African-American woman's expectations? This proves my point that the people criticizing Wal-Mart are not the ones who need to shop there.

My film title is "Why Wal-Mart Works & Why That Makes Some People Crazy." 1.3 million Americans choose to work at Wal-Mart. 138 million people choose to shop there every week. Given the tone of her earlier writings, I'd bet a nickel Ms. Featherstone is pro-choice. So why is she critical of the free choice Americans make to work and shop there? Because she and Greenwald feel millions of Americans just don't understand how vile Wal-Mart truly is, and they must be illuminated.

The anti-Wal-Mart group Wake Up Wal-Mart boasts on it's website that they have 160,000 members. 160,000 Americans shop at Wal-Mart every 12 minutes. That's really what makes some people crazy.

Wal-Mart Doesn't Charge Enough For Food

2005-12-28T07:49:00.000-05:00

According to this blog. To whit, the following slapstick comment:

"I do feel strongly that we’re not paying enough for food. That it is an issue, in part, of priorities. We only pay 11% of our disposable income on food in this country. That is less than anywhere else on Earth and that is less than any other civilization that has ever been on this Earth. For some reason we do not want to spend more"

One again I repeat, the people criticizing Wal-Mart are not the ones who need to shop there.

Thanks Greenwald Part 3

2005-12-27T17:26:00.000-05:00

From The AP:

CHICAGO (Reuters) - Wal-Mart Stores Inc. recorded its biggest shopping day of the year on Friday, not Saturday as it had expected, the vice chairman of the world's largest retailer said on Tuesday.

John Menzer, who heads Wal-Mart's U.S. division, said more people than expected took Friday off from work and headed to stores to pick up last-minute gifts.

Demand for gift cards was particularly strong, and stores raced to display new merchandise by Monday morning to take advantage of customers redeeming those cards.

"We were expecting to have huge gift card sales," he said in a telephone interview. "It has even exceeded our expectations."

Of course, when you buy gift cards, you are loaning Wal-Mart, or any retailer, money interest free.

Where Would Jesus Shop?

2005-12-27T17:24:00.000-05:00

Unions cleverly thought this one up, and it signals the fact that they have officially jumped the shark. I get asked this on the radio quite a bit, and the best answer I can think of to this most insipid of questions is:

"We'll have to ask him when he comes back."

Errors In The Frontline Wal-Mart Special

2005-11-27T09:10:00.000-05:00

I got an email from Bob Peterson, who carefully examines many of the errors in the Frontline report on Wal-Mart. His thorough analysis can be found here. Good stuff.

More proof, as if we needed it, that the people who criticize Wal-Mart are not the ones who need to shop there.

Can We Get Greenwald To Do Another Film?

2005-11-26T14:54:00.000-05:00

This one sure seems to have helped! From AP

The world's largest retailer said Saturday that it expects to post a solid 4.3 percent gain in same-store sales for November, helped by better-than expected sales during the post-Thanksgiving day shopping rush.

Genuine Frontier BS

2005-11-24T11:42:00.000-05:00

Or Bad Statistics. These numbers, based on research I did for the "Why Wal-Mart Works" book earlier this year, are not statistically possible. But look at 1)Who funded the studies and 2)Who did them.

From AP:

Researchers said random purchases at 60 Wal-Mart stores in California found that the wrong price came up 8.3 percent of the time. At 78 stores in Illinois, Indiana and Michigan, check-out scanners rang up the wrong price 6.4 percent of the time. In both states, some prices rang up higher and some were lower.

The recent studies were commissioned by the Union of Food and Commercial Workers, which has been unsuccessful in its attempts to organize Wal-Mart workers for years, and released by a UFCW-backed campaign group, Wake Up Wal-Mart. The research was conducted by the University of Illinois-Chicago Center for Urban Economic Development and the University of California-Berkeley.

Wal-Mart cannot be faulted on logistics and IT. WalmartWatch is just getting boring now.

WMT Stock Price Since Greenwald's Film Premiered

2005-11-24T11:09:00.000-05:00

Wal-Mart stock has gained about $12 billion in market cap since Robert Greenwald's mockumentary premiered in New York.

Thanks Bob!

Or maybe it was OUR film that did it. Yeah, that's it! Call Lee Scott!

Huffington Post

2005-11-24T11:00:00.000-05:00

The folks at HuffPo were good enough to run the following op-ed yesterday.

DEFENDING WAL-MART by Ron Galloway

In Ayn Rand's Atlas Shrugged the productive, inventive minds of the world are constantly belittled and attacked by the envious and agenda-driven in a society whose squeaky wheel gets the most grease. Sound familiar?

Wal-Mart, hate it or love it, will always be the subject of controversy. I set out on my own to find out what makes the retail giant and employer of over 1 million Americans tick, and I made a film about Wal-Mart, called Why Wal-Mart Works, and Why that Drives Some People C-R-A-Z-Y.

Why does Wal-Mart make some people crazy? Because they started selling groceries in California, that's why. A certain union got unhinged and funded a staff of 35 at WalmartWatch to do nothing but use member dues to pester Wal-Mart. Is it a prudent use of union dues to pick on a store most of their dues-paying members enjoy shopping at? Unions and assorted special interests (the National Petroleum Marketers Association, hmm...) are comically obsessing on a store 138 million people voluntarily shop at every week. It's just a store. The anti-Wal-Mart campaign is the biggest waste of time and resources since the last 3 Star Wars movies.

Speaking of Hollywood, why are they picking on Wal-Mart? Wal-Mart is Hollywood's biggest customer, responsible for nearly 40% of DVD sales. Except of course, my film's DVD, which they won't carry. Check out SAG's website, Wal-Mart is a guild signatory. Did Robert Greenwald's anti-Wal-Mart film use union crews and pay guild wages? Just asking...

Has Wal-Mart lost the life savings of investors, as WorldCom did? Did Wal-Mart just fire 30,000 workers, many of them union, as GM just did? Does Wal-Mart stiff its workers on their pensions, as the airlines are doing? No, no, and no. Wal-Mart saves families nearly $2,000 a year on average, Wal-Mart is hiring, and even part-timers at Wal-Mart get an employer match in their 401-k!

I firmly believe no special interest group in this nation benefits the poor and blue collar as much as Wal-Mart does. Ask a single Mom where she shops. I'll tell you where she shops. Money is freedom, and by saving families money, as is its mission (Always Low Prices), Wal-Mart literally provides their customers more freedom in their daily lives.

Wal-Mart's detractors are focused and well organized in their sub-optimal media assault on the company. I think that Wal-Mart believes that by doing their best to fulfill their responsibilities to their associates and customers, the need to defend their success and innovations should be an afterthought. In today's world, it's not.

In Atlas Shrugged John Galt is a fabulous businessman and inventor, yet is constantly criticized for benefiting society as a whole through his innovation and success. In the book, the question is famously asked, "Who is John Galt?"

Sam Walton is John Galt.

We're back

2005-11-24T10:59:00.000-05:00

Rob and I have finished the initial madness involved with promoting the film. We promise to be better about blogging from now on. This was the busiest 3 weeks of my life.

Thoughts from Rob Galloway

2005-11-03T12:01:00.000-05:00

FLW TOUR

I remember in 1996ish, I was producing fishing programs for ESPN
Outdoors. I was hired to work on the FLW Tour, a professional bass
fishing series. The tournament's title sponsor was Wal-Mart. Every
other weekend or so, I'd be flying into some part of the country,
renting a car and ending up in a Wal-Mart parking lot. The large
television tent where we broadcast the tournament results and
weigh-ins would be constructed in the parking lot of each location.
Because the set-up was the same in each location, there would be times
where I couldn't remember what city I was in. I don't know how many
times I'd go strolling through Wal-Mart before and after my work. The
craziest thing would be arriving somewhere that had turned very cold.
We'd haul into the Wal-Mart and look for gloves, long underwear, and
ski masks. It was all to prepare for the early 6am launches where
you'd be in a bass boat with a top bass fisherman and filming him (or
her) as they sped off to their fishing hole. Something about going 60
and 70mph in a boat at that time or morning made my teeth grind.
Holding on for dear life, one hand on the handle, one holding the
camera, I would think over and over, "how did I exactly get here?"

Bass fishing is extremely large. I remember a quote several years ago
that were over 50 million recreational fishermen in the United States.
Bass fans would pile into the Wal-Mart parking lots all over the
country when we'd come into town. The local Wal-Mart would always
played a big role in the event, and their community would show up in
hundreds to catch a glimpse of their favorite bass fisherman.

I'll never forget the first supercenter we travelled to with the FLW
Tour. I walked in and my jaw dropped. I remember thinking, if you
forget your bread, there's no going back once you get all the way
across the store to fishing supplies. For someone with ADD, the
supercenters were always a fun challenge.

It's been been over four years ago since I retired from I called my
"bass boat beatings."
It was fun to explore the parking lots and people of Wal-Mart again
this year, not from a bass fishing adventure, but from a documentary
looking into the "WHY WAL-MART WORKS."

We're done

2005-11-03T11:59:00.000-05:00

"Why Wal-Mart Works" is color-corrected and is being duped, thanks to brother Rob, who finished everything while I was debating Greenwald all week (it seems).

Thoughts on the Lou Dobbs show last night soon....

Finishing the edit

2005-10-29T17:34:00.000-05:00

Rob and I are in the edit booth right now finishing things up. It's weird finishing up a film while surfing the web reading the news about it. It's been an odd week.

We'll have an article by Ann Zimmerman in the Wall Street Journal on Monday or Tuesday.

My Distributor Part 2

2005-10-28T17:43:00.000-05:00

According to the AP:

Wal-Mart said that it has no plans to sell DVDs of the positive film on Wal-Mart in its stores, but they can be purchased on http://www.whywalmartworks.com.

Guess that settles that!

My distributor

2005-10-27T22:48:00.000-05:00

From the blogosphere "To counter Greenwald's offensive, Wal-Mart is distributing a video by Ron Galloway that says nice things about them. Though he claims no financial assistance from Wal-Mart, I have learned that Wal-Mart hooked up the director with a local Fayetteville distributor, Hannover House, who sell most all their product to W-M."

Whatever. And my response:

It's Ron Galloway, from "Why Wal-Mart Works." Sorry, Wal-Mart didn't hook me up with Hannover House. If you do a D&B you will find they are one of the only financially stable video distributors left. They also pay through a "lockbox" at a bank whereby the bank collects all monies and pays all parties (me, the replicators, art designers) before the distributor. My wife informs me I need to make my money back on this film, but soon. I tend to listen, because she is a surgeon and knows how to handle a knife.

Wal-Mart is also Dreamworks' biggest customer, and Universals', and Image Entertainment', etc.

Who Is Paying For My Film?

2005-10-27T19:04:00.000-05:00

I get asked that a lot. My budget is $85,000 and it's not like two brothers can't piece that together from savings and credit cards.

But still people think Wal-Mart paid for it. Which begs the question:

Would the world's largest corporation pay for a film they haven't even seen?

I hope not.

More Fun TV

2005-10-27T18:59:00.000-05:00

I will appear with Robert Greenwald on CNBC Monday (the 31st) around 1:40, and then again that night with him on Showbiz Today on CNN sometime between 7 and 8.

One of the volunteers arranging his screenings called today, said they hated Wal-Mart, and then asked if I was interested in doing a screening of my film. I said yes, and if any more call, I'll say yes too.

He could not have been nicer, by the way.

Tons of newspapers called today. Losing my voice again. Better get it back by Monday.

It has begun.....

2005-10-27T11:22:00.000-05:00

I was a guest on CNBC's "On The Money" at 7pm last night. It was my first live TV show, and it was very weird. They had me sitting in a room by myself with a camera staring at my like the HAL 9000 from 2001. Then you hear people in your ear.

The composer for WWW told me when you are sitting down, if you're nervous, straighten out your legs and it will provoke a calming physiological response. He was right.

All in all it was fun. I called my opponent on the panel from Walmartwatch and congratulated her.

Good Reuters article on the film here.

Stock Footage

2005-10-26T13:17:00.000-05:00

One reason our cost on the film is relatively low is that we used a small amount of stock footage, which these days runs around $75 per second.

So ten minutes of b-roll stock footage would cost us $45,000.

Nice work if you can get it.

ROI on WWW

2005-10-26T13:10:00.000-05:00

I am not a political guy. Politics is a business, and it's a business I have no interest in.

I do like successful investments, however. The final budget, including publicity for this film, will be around $85,000 before Robert and I can pay ourselves. BTW, that is 6.5% of the budget for the other film.

At my royalty rate, that means I need to sell about 25,000 copies to breakeven. I feel that my distributor will hit that target, especially given this level of publicity.

Then Rob and I pay off the VISA bills and home equity lines, and our wives let us move back into our houses.

Better Busy Than Not

2005-10-26T13:08:00.000-05:00

Well today should be interesting....

The press release for "Why Wal-Mart Works" hit Business Wire today, and I am booked on CNBC tonight sometime from 7 to 8.

My voice, however, is gone from talking to reporters.

Jim Rogers from WWW

2005-10-23T21:40:00.000-05:00

As teased, here is part of our talk with famous author and adventurer Jim Rogers...

"Nobody is forcing anybody to go to Wal-Mart as far as I know. I grew up in a small little town everybody goes to Wal-Mart from miles around but it’s not as thought Wal-Mart’s out there with machine guns saying you got to come to Wal-Mart, people are driving from miles around because they get better prices, better quality, and better service. It’s like anybody else when they come to town, if they give a better product, people are going to buy it.

You know a hundred years ago people screamed all over Europe that products were coming from America. They railed at people who bought American products, but American products were cheaper, and better, and so people bought them. People are always going to buy products where they can get the best price. Fifty years ago it was Japan, that people railed about. Said those products come from Japan and its cheap. Well that’s the point. You want to buy good quality products that are cheap and if you can figure out where they are going to come from in advance, you should do it."

Michael Cannon Interview

2005-10-23T21:36:00.000-05:00

Michael Cannon, the senior health policy analyst from the Cato Institute, had an interesting story in his interview for "Why Wal-Mart Works."

Something really interesting happened in Santa Fe, when Wal-Mart wanted to open a second store there. The city counsel split down the middle about whether to allow Wal-Mart to open another store, and the mayor had to break that tie. Now put aside for a moment whether it’s a good idea that entrepreneurs should need the government’s permission to open and new store and try to offer people cheaper products. If you look at that city counsel vote, you notice something interesting. Every city counsel member with a Hispanic surname voted to allow Wal-Mart. Among those with non-Hispanic or more Anglo surnames most of them voted against allowing Wal-Mart. Now that may not mean anything, but it may mean that people who are closer to low income workers who know a little more what its like to have to struggle to put the food on the table, are very appreciative of Wal-Mart, and that others who are opposing Wal-Mart have lost touch with that segment of society.

Filming in Boone, NC

2005-10-23T21:33:00.000-05:00

Robert and I shot in Boone, NC today. We're almost done shooting, which is probably good since we are due to deliver the master in 10 days. The leaves were changing in Boone and the people were thoughtful regarding Wal-Mart. Filmed in 24p on a DVCPRO 50 camera in 16:9. Gonna look good.

We're interviewing a very famous blogger tomorrow. More to come.....

Info For Filmmakers

2005-10-21T18:09:00.000-05:00

The software we are using for the film: Media 100, Protools, After Effects.

We had to edit a trailer for our distributor in a rush the other day, so we ran into the Apple Store in Soho, bought a PowerMac and Final Cut Express, jumped in the car heading for Maryland, and digitized and edited a trailer in the car while riding down the New Jersey Turnpike.

By the time we hit Carlisle, PA it was done. We found a hotel with wifi, and uploaded the 5 minute trailer we had just edited on the road.

You can't buy that kind of fun.

Jim Rogers Interview

2005-10-21T18:04:00.000-05:00

We had a great interview the other day with Jim Rogers, the famous author and investor. He has a 2-year old daughter who already speaks English and Chinese.

His interview will be up shortly. It centers mainly on China and Wal-Mart.

Street Date For The DVD

2005-10-21T17:57:00.000-05:00

The street date for "Why Wal-Mart Works & Why That Drives Some People Crazy" DVD is officially November 15th. It will be available pretty much everywhere, i.e., Borders, Virgin, Barnes & Noble, Amazon.com, Transworld, Musicland, Hastings, Tower, etc..

I kind of doubt Target and Kmart will carry it, though.....

That means I have to deliver the film November 2nd to the replicators. Mas cafe, por favor.

More Robert Prechter

2005-10-21T17:43:00.000-05:00

From "Why Wal-Mart Works"

I think the herding principle has a lot to do with the protests against Wal-Mart. When people want to express a collective mood, they want to share in it. So generally, rallies, and protest marches and that sort of thing are a good way for people to collectively express that sort of that mood. And of course they reinforce each other when they get in a crowd situation. People have manipulated crowd situations forever, from Alexander the Great to Bill Clinton. So it’s a good way, if you want to make political progress in some way, to go about it. But again, these things don’t last very long. They last a year of so, then something else comes by, flips in front of the collective consciousness and they’ll focus their emotions on something else.

So if there’s any message to the people who work hard to keep Wal-Mart going, and the shopper coming in, it is “this too shall pass.”

Quote from Robert Prechter in the film

2005-10-21T17:16:00.000-05:00

This is from Robert Prechter 's interview in the film:

Wal-Mart of all companies helps the little guy more than anybody. It’s the primary reason people who are blue collar workers at the lower end of the scale are surviving. It’s the primary reason people who are trying to survive on social security checks can actually do it. So it's the millions and millions of people at the lower end of the economic scale that Wal-Mart is helping. I think that contradiction goes to show that this (the protest) is mostly a sociological phenomenon and has very little to do with Wal-Mart’s activities.

The Toothpaste Protest

2005-10-21T09:52:00.000-05:00

Over at walmartmovie.com, they note that Wal-Mart "controls" 25% of the U.S. toothpaste market, and we should not buy toothpaste from there to "get Wal-Mart's attention."

So let's run some numbers. Assume 300 million Americans buy 1 tube of toothpaste every other month. That's 1.8 billion tubes of toothpaste sold per year (300,000,000 x 6). Therefore, Wal-Mart sells 450,000,000 tubes per year. Let's assume shoppers buy 2 tubes at a time. If all Wal-Mart shoppers decided to buy toothpaste somewhere else, as per the protest, we would have to DRIVE somewhere else. Let's say that trip is 1/4 mile. That means 225,000,000 (450,000,000/2 tubes per visit) trips of 1/4 mile would have to be made, resulting in 56,250,000 miles of NEW driving being made to conform with the protest.

Let's further assume the average car gets 15 miles per gallon. Therefore 3,750,000 gallons of gas would be burned annually travelling somewhere else to get our toothpaste (56,250,000/15 mpg). Just so we can protest. At today's prices, this would cost consumers an extra $11,250,000 to "protest."

But wait. One barrel of oil produces 19.5 gallons of gas when refined. Therefore, 192,307 barrels of oil would be consumed by this protest (3,750,000 / 19.5). The U.S produces about 6 million barrels of oil per day. So this protest would consume 1/2 of one day's production of oil in the U.S.

Is this protest environmentally friendly?

(And please check my math, I'm on my 6th cup of coffee)

WalmartWatch interview request

2005-10-21T06:09:00.000-05:00

Walmartwatch in DC declined an interview with me for "Why Wal-Mart Works" earlier this week. Which is, of course, their right. But I have to say they couldn't have been nicer or more polite to me, especially once they realized I was "that guy."

Cover art I probably won't use

2005-10-21T04:48:00.000-05:00

Although it is growing on me, little baby hammer and baby sickle.......

The artist is Joanna Davidovich

First news article on the film

2005-10-21T04:33:00.000-05:00

Anita French wrote the first article about the film. She interviewed me as Robert and I were trying to figure out how to escape Manhattan. It's a good article, and she's very smart and nice, but I am kind of embarrassed that in this sentence "It was like a collective snit being thrown right now," Galloway said. "I couldn't find anything humongeously wrong with what (Wal-Mart) is doing." I used the word "humongeously."

What am I, seventeen?

26 Days Away

2005-10-21T04:25:00.000-05:00

From the release of "Why Wal-Mart Works & Why That Makes People C-r-a-z-y." This blog will follow the ride as we countdown release of our indie film on the world's largest company.