Defying the Waltons

It’s a hot trend (I’m not making this up):  Upscale stores and name brands work to distinguish themselves based on how much good they do for the environment.  Fashion designers labor to get their names associated with endangered species. Trendy New York stores proudly announce their donations to social programs. 

Great!  I don’t care why they are promoting the environment and social justice, as long as they’re doing it.  Problem is, I don’t have any opportunity to show my support for these guys or my lack thereof for their less "noble" competitors because I don’t buy their products anyways.  Never have, never will.  I’m a bargain basement live-to-haggle kind of female. 

Turns out I may get to cast my cash ballot after all.

Until recently, the only problem I had with Walmart was that their stores were ugly.  Well, also they reminded me of the K-Mart up the street when I was a kid:  Chintzy, cheap, everything looking like it was manufactured using discount materials and methods even if you didn’t buy it on Blue Light Special.   I preferred the battered wood floors of my local Value Village and their sagging racks of old stuff. At least when their merchandise was being made, nobody knew I was going to buy it for a tenth of its retail "value."  They didn’t plan that into the weight of cotton in the jeans or the durability of the plastic toys or the amount of human labor that went in to painting the birdhouses.   But I’ll confess, sometimes those Walmart bargains got me.   

Recently, though, ugly snippets have been creeping into my awareness. 

In November, Business Week profiled America’s top philanthropists.  The Walton family, with 108 billion in assets had given away one percent.  (This contrasts, for example, with Bill and Melinda Gates who have around 45 billion and have given away approximately half as much as they now own.)  Petty of me, perhaps, but I couldn’t help being disappointed in Sam’s family.

Then, during the holidays, I read that Walmart’s predatory toy pricing was driving Toys R Us and FAO Schwartz to the brink of extinction.   Because Walmart sells such a wide range of merchandise, they can (and apparently do at times) target a specific retail sector or a specific product and sell it at a loss.  As big as they are, they can afford to live off of the profits from other sectors until their competitors shrivel up and die. Walmart can lose money on toys indefinitely because they sell food, clothes, tools, cigarettes, canoe paddles, and nasal syringes.  Toys R Us can’t, because they sell only toys. 

Now I don’t care a rat’s patooee about Toys R Us or FAO Schwartz.  I still haven’t forgiven Toys R Us for marketing a Nintendo game called Contra (ie. contra the Sandinistas) back in the early Eighties.  When I do get coerced into stepping through their doors for the absolutely right set of Legos or the nearest diaper wipes, I bring my Southwest Airlines barf bag just in case I accidentally trip into a full aisle of pink Barbie accessories.  And FAO Schwartz! If they’re still on their feet, they’re most likely elbowing to the front in a line of snoity Fifth Avenue boutiques, flaunting some endangered species picture that’s pinned to their logo.  No loyalty from me.  All the same, if these enormous, well capitalized toy retailers were gasping, I found myself wondering about the little shop down the street.

Speaking of the little guy, I couldn’t help wondering also about the little store south of the border when I read that Walmart had managed to capture a third of all household expenditures in Mexico last year.  Can it be???  Maybe the New Internationalist had their numbers wrong.

Next I read in The Tampa Tribune about an indigenous Florida grocery store chain closing stores and laying off 1500 employees because they’d been out-competed by you know who.  Then came the article in the Seattle Post Intelligencer about a class action suit against Wal-baby because they were compelling their employees to work overtime without pay.  Simultaneously Walmart was being dissed on the net for paying minimum wage to those employees who were actually allowed to punch in. 

By this point, I’m starting to feel like The Waltons just ain’t good wholesome family entertainment. 

Then, while I’m trapped in coach class my husband hands me a copy of Fast Company.  One of the lead articles is an expose about Walmart squeezing their suppliers.  It’s about those vendors getting squeezed so hard that they are squeezed right into bankruptcy court or into shipping containers that carry them to places where they can save a few cents by not offering their employees things like health care or living wages or overhead lighting.   When I’m done reading I have the urge to wash my hands with disinfectant.

Now I get worried.  I’m a big fan of Costco, to the point that I’ve been accused of doing guerrilla marketing for them.  What if they’re slimeballs too?   So the next time I go to Costco, I march up to the Customer Service Counter, and I say, "I spend a lot of money here and I want to know what I’m really buying."  I tell the poor woman behind the counter what I’ve heard about Walmart. 

"I don’t know about suppliers," she says.  "All I can tell you is that they treat us really well."  (I kind of suspected that already.  There’s gotta be some reason when the cashiers are funny, smart and working their butts off and when the same guy checks your receipt for six years running.) She gives me a phone number for Corporate.  I call, repeat my question three times, and — get this– they put me through to the office of some Senior Vice President, who calls my house twice and finally leaves a number where I can reach him at 7:30 in the morning.   

He won’t talk bad about The Waltons to a random stranger at 7:30 a.m.  The closest he gets is something like this, "We don’t act in the same fashion as some of the things I’ve read about our competitors."  What he does say is that corporate policy is to respect suppliers, which is why it’s posted in the stores.  Costco aims to not retail more than thirty percent of any given vendor’s product.  That way the vendor still has a viable business if the contract is terminated.  After two years of working together, a contract with a vendor can’t be terminated without sign-off from two senior execs.  There are "no annuities", he said.  If a supplier can’t compete on quality and price, they won’t be around long.  However, the goal is to be tough but fair.  "If our vendors don’t prosper, we both lose."   Hmm.  Maybe there’s a reason Costco’s not hitting the pages of the Post Intelligencer, the Tampa Tribune, the New Internationalist, and Fast Company.

I do a little research on the employee thing.  Those hard-working warehouse staff are starting around $10, i.e. a couple bucks above minimum, and a cashier with ten years experience is making more than 40K — plus almost forty percent more in benefits.  In fact, the overall average is thirty-eight percent in benefits.  Most of their warehouse managers started on the floor and liked the place well enough to climb through the ranks.    The point being: making a profit doesn’t have to mean sucking the life blood out of everyone around you, inside your org and out, which doesn’t make Sam Boy Walton and his clan look any better.

So I’m voting with my dollars.  Walmart and their warehouse chain, Sam’s Club, are out.  They are out even if they paint spotted owls, Asian elephants or poison dart frogs on every product in the store.  Heck, I’d rather set foot in Saks. 

1/29/04 

50 top philanthropists:  http://www.businessweek.com/magazine/content/03_48/b3860605.htm

New Internationalist re Mexico: 

http://www.newint.org/issue325/worldbeaters.htm –

http://www.newint.org/issue363/keynote.htm – 41k – 2004-01-15

Kash ‘N Karry:

http://www.tampatrib.com/News/MGAIUOQTHPD.html

KB Toys:

http://www.starbanner.com/apps/pbcs.dll/article?AID=/20040129/APF/401290695