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.
Tuesday, April 10, 2007
Friday, December 08, 2006
Should Wal-Mart Buy Barclays?
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?
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?
Saturday, November 18, 2006
Eduardo Bends A Little At Wal-Mart
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.
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
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.
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)
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.
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.
Wednesday, July 19, 2006
Why Context Works
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.
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.
Wednesday, July 05, 2006
Extorting Wal-Mart
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.
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.
Monday, July 03, 2006
ASDA Union Negotiations
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.
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.
Saturday, April 08, 2006
Halt Global Warming. Stop Making Movies.
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.
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.
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