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September 7th, 2015
Filed under: Costco,Employees,Employment,Training
Tim Worstall is becoming one of my favorite writers on Walmart. We are polar opposites on the level of the 60 Minutes Point/Counterpoint duo of James J. Kilpatrick and Nicholas von Hoffman, but Worstall does get a conversation going. Like this one headlined: Walmart Is Changing Its Labor Model: How Many Workers Will Lose Their Jobs? Worstall writes:
Walmart is quite significantly changing its labor model. Moving from a near hire any live body and let them get on with it one to something where people are well trained, well paid and presumably of rather higher productivity. This is what many have been crying out for the company to do for years of course: move to something closer to the Costco model than the one that Walmart has traditionally pursued. However, as some like me have been pointing out all along there is a flip side to that change in models. Which is that the end aim is of course to employ fewer of those more productive people at those higher wages. The point being that if one can raise productivity levels by more than the increase in cost then of course profits will rise: that being the end goal for all shareholder owned companies. The interesting question is going to be how many people either lose or don’t get jobs as a result of this strategic change: and I’ll suggest a method by which we can calculate this a little later.
I don't disagree with Worstall there---I offered my own spin on the story in CAN WALMART UPSKILLING CREATE LIFERS…?---but where he goes down the wrong road is where he attempts to make a comparison to support his case.
For well over a decade now I’ve been pointing out that yes, sure, Costco pays its workers very much better than Walmart does. But it also uses, per unit of sales, about half the labor that Walmart does. Thus the shouting that Walmart can and should pay its workers like Costco does comes with that sting in that tail: for moving to the same pay structure would entail at least attempting to move to the same productivity levels. Meaning that Walmart would employ about half the number of people per unit of sales than it currently does. And now we’re seeing that Walmart is taking at least baby steps to that higher road labor model. And the interesting thing is going to be, well, is the prediction about employment levels going to come true too?
Costco is not Walmart (full disclosure, I have a Costco card) and workers in the two operations do very different jobs. When I worked retail back in the dark ages of the '70s, I would estimate I spent one-third to one-half of my hours actually helping customers on the floor find what they needed. Granted, I worked mostly hardware which involved answering a lot of home fix-it questions, but I think the model held generally throughout the store. Costco is a warehouse operation where most customer questions, when they have questions, are in the vein of where do I find the cases of toilet paper? That takes a lot fewer people on the floor. Walmart is different. The challenge is more than simply retaining workers who can stock a shelf at more than a snail's pace. Walmart needs people who are not surly, who are not focused on when their shift ends so that they can get out from under the moronic department manager's gaze. Walmart needs people who are personable and helpful, and that is not a matter of productivity---accomplishing financial goals with fewer employees---that is a matter of having workers who actually enjoy their jobs. Jeff Hess: Have Coffee Will Write.
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September 6th, 2015
Filed under: Charity,Employees,Walmart Hunger
thanksgiving 131120 There are hungry children living in Indiana. That is a shameful fact for the wealthiest nation in the history of the Earth where the minimum wage does not provide enough money for a couple to feed themselves and their two children. Walmart leveled up in corporate infamy when the above photo went public two years ago. I keep reusing the picture every time the Walmart Family Foundation dips into the Walton's purse to scatter coppers to the poor because I don't want to feel all that good about the least they can do. Like help feed hungry children in Indiana. Lu Ann Franklin writes:
Northwest Indiana residents donated $21,356.26 during Wal-Mart’s Fight Hunger. Spark Change campaign from April 6 to May 3. The campaign asked Wal-Mart customers to donate to their local Feeding America food bank at a store register or to purchase select products from some of the nation’s leading food companies, including Campbell’s, ConAgra Foods, General Mills, Kellogg Co., Kraft and Uniever. The Wal-Mart Foundation also will award another $43,000 in a State Giving grant to support the expansion of the Food Bank’s BackPack program. The hunger-relief program provides students with take-home weekend meals throughout the school year. The grant will enable the Food Bank of Northwest Indiana to add another 300 students to the program in the 2015-2016 school year.
Good on the BackPack program---a program I support at one of the schools I work in---and good on the Feeding America food banks. As for the Walton's and their pet foundation, not so much. Jeff Hess: Have Coffee Will Write.
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September 5th, 2015
Filed under: Employees,Employment,Training
When I worked discount retail in high school and college I never had any illusion that I would make a career out of my job. I paid attention, did my best, took care of my departments---hardware, automotive and small appliances---and enjoyed helping customers because that was the work ethic I was raised with, not because I expected to be working for the company any time in the future. The people who did were called, with a certain derision, I confess, lifers. There were two kinds of lifers: men, looking to rise in management and someday have their own store; and mostly married women with teenage or grown children working to bring second incomes into their families. We had no training program as such. People who aspired to more important jobs were simply brought along. Walmart has always had informal and formal training programs for managers, but the workers on the floor were interchangeable widgets who could learn their jobs in a few days and then be expected to exert themselves as good little workers until they left. The Great Recession changed all that. The Republican fostered recession pushed millions of seasoned men and women onto the streets looking for work, any work. Some walked through the doors of Walmarts across the country and Walmart got a taste of what having motivated and conscientious workers was like. Walmart enjoyed the fruits of the recession for more than four years, but finally, when we dug ourselves out of the hole, those people went back to more meaningful jobs with much higher salaries. By then, however, Walmart was hooked on quality workers and the Bentonvile Behemoth began jonesing. Walmart CEO Doug McMillon, whose first Walmart job was on the loading dock while he was in college, inherited his company's addiction and, in part, convinced his board that wages had to come up with the company was to retain at least some of these recession-bred workers walking out the doors. Hourly wages of $9 or $10 weren't enough and now Walmart has turned to a plan to create better workers internally by upskilling. Tamar Jacoby, writing in Wal-Mart Tests ‘Upskilling’ for the Wall Street Journal tells us:
Wal-Mart is famous for keeping costs down, including employee-related costs. In Joplin, the company is testing a new approach: investing in workers through higher wages and training, on the theory that this will pay off all around—for customers, the company and employees. Wal-Mart plans to roll out the new training program to all of its more than 4,500 U.S. stores by early next year, according to Kristin Oliver, executive vice president of people for U.S. operations. And by then, all but the newest Wal-Mart hires will earn at least $10 an hour. Wal-Mart isn’t alone in its new focus on training front-line workers. The trend, known as “upskilling,” is rippling across the retail and service industries. McDonald’s, Starbucks, Gap Inc., CVS Health, Kaiser Permanente and UPS are moving in the same direction. It’s a big change, even for companies with a reputation for taking care of employees. Many firms train college-educated workers; most invest in grooming managers. But until recently, very few bothered to train entry-level service workers. One motive is better public relations at a time when inequality is a hot-button political issue. But bottom-line calculations also play a role. Employee turnover costs money—by industry estimates as much as $5,000 per front-line worker, or 20% to 30% of an entry-level salary. Standard turnover in retail is 50% in the first six months. If Wal-Mart can reduce this churn, persuading people to stay at least 12 to 18 months, it will save “tens of millions of dollars a year,” according to Ms. Oliver. Wal-Mart also hopes that the new training will result in better customer service and happier shoppers. Economists who study retail distinguish between “low-road” and “high-road” employers. One group keeps labor costs down, the other invests more in workers and reaps the benefits in higher productivity. Cost-conscious Wal-Mart is trying to move toward the high road.
What must be keeping McMillon up at night is the question of how long will his board and stockholders tolerate this high-road experiment if stock performance doesn't dramatically improve? Jeff Hess: Have Coffee Will Write.
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September 4th, 2015
Filed under: Despoilment
I once read all of Moby Dick in one week, all 638 pages, 135 chapters, for a college class. I hadn't procrastinated, the professor simply gave us that much time. That was only 91 pages, or so, a day. That load pales before what Walmart is asking of the citizens of Lake Elsinore, California. The Bentonvile Behemoth dumped a 5,400-page environmental impact report on citizens, allowing them only 45 days to read and comment on the report. That's 120 pages a day, seven days a week for six weeks.. I'm a fast reader and I would need at least six hours, one-quarter of my day, to read that much. Michael Williams writing in Lake Elsinore: Light reading? 5,400-page Walmart EIR available for The Press-Enterprise reports:
Plans for a new Wal-Mart Supercenter in Lake Elsinore have been available to the public for two years. Now, residents can see the environmental impact analysis and supporting studies – all 5,400 pages of them – for the project in the northeastern section of the city. As expected, some favor the plan … and some do not. “I think it’s going to bring property values down,” said Mike Matthews, who would be neighbors with the store if built. “I also think the effect on the neighborhood is going to be even worse. It’s bad enough that we’ve already got shopping carts strewn around and homeless everywhere. It’s going to bring more traffic congestion.” Others, however, expressed support when Wal-Mart representatives submitted the application in July 2013. The retail giant also plans to build a store in Wildomar, while shutting down its southern Lake Elsinore site. The plan on Central is to erect a 154,487-square-foot Supercenter and two small retail buildings on an 18-acre lot facing Central and stretching along Cambern to Third Street, a dirt road.
I suspect, but do not know, that the 45-day reading period is boiler plate, a standard six-week review period more suitable for construction variances and the like. Reading the very dense document and all the appendices would be enough to make a patent attorney weep. Jeff Hess: Have Coffee Will Write.
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September 3rd, 2015
Filed under: Employees,Five closed stores,Organized Labor
evil smiley 150913 No one ever believed the story about the plumbing, although plenty in the tin-hat brigade went for the Jade Helm 15 conspiracy. No, the only trope that made any sense was that the five Walmarts suddenly closed back in April was payback for union organizing. So, the stores are now getting ready to open in time for money-making time and each store gets a whole new crew of workers. Three guesses who won't be rehired. Nathan Layne, writing in Wal-Mart to reopen five U.S. stores at center of union complaint for Reuters reports:
Wal-Mart Stores Inc said it would reopen in late October to early November five U.S. stores whose closure had prompted a union to file a complaint with the National Labor Relations Board, claiming the retailer was retaliating against workers for organizing. Wal-Mart will start hiring for the stores in Texas, Oklahoma, Florida and California, and will encourage previous employees and those that transferred to other stores to apply, company spokesman Lorenzo Lopez said on Wednesday. Wal-Mart announced the store closures in April to fix plumbing and other repairs. The move impacted some 2,200 workers and the United Food and Commercial Workers International Union (UFCW), which backs campaigns pushing the retailer to improve pay and benefits for store employees, filed a complaint to the NLRB that is still pending. In the complaint the UFCW accused Wal-Mart of using plumbing problems as an excuse to close a store in Pico Rivera, California, in retaliation against workers there who have been active in attempts to organize for better pay and benefits. The other four stores were included as cover, the union claimed.
Closing four stores, laying off some 1,200 people, just to burn out one nest of union organizers is harsh. Perhaps too harsh even for Walmart. When I think more, however, that could just be the point, the cover Walmart needed. No one would believe they would be that arbitrary, that cruel, monstrous to destroy the lives of 1,200 good families just to keep the UFCW at bay, right? Evil smiley is smiling. Jeff Hess: Have Coffee Will Write.
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September 2nd, 2015
Filed under: Wall Street
Tim Worstall thinks we should all be thankful for our cheap plastic crap from China and be good little consumers so that the economy will continue to chuck along producing profits and bonuses and dividends for those with enough disposable income to invest in gamble on the stock market. Writing in Bernie Sanders Doesn't Understand Trade And Why It Is Good That Walmart Saves Consumers $263 Billion for Fortune magazine, Worstall gets around to the Bentonvile Behemoth:
Which brings us to the Walmart comparison. Being able to buy from China and being able to buy from Walmart have the same effect upon households. Both are cheaper sources of the things that we desire: thus being able to get the same stuff with money left over, or being able to get more stuff for our incomes, makes us better off. And we’ve got very good estimates of how much better off Walmart has made us:
There is little dispute that Wal-Mart’s price reductions have benefited the 120 million American workers employed outside of the retail sector. Plausible estimates of the magnitude of the savings from Wal-Mart are enormous---a total of $263 billion in 2004, or $2,329 per household. [We debunked that fake number years ago. JH] Even if you grant that Wal-Mart hurts workers in the retail sector---and the evidence for this is far from clear---the magnitude of any potential harm is small in comparison. One study, for example, found that the “Wal-Mart effect” lowered retail wages by $4.7 billion in 2000.
That’s from Jason Furman, Obama’s Chair of the Council of Economic Advisers. This is not some far out free market estimate, this is the received economic mainstream talking. The reason we trade is to get things cheaper or better than we can make them ourselves. This is true whether we’re talking about buying goods from foreigners or because we start to patronise one retailer over another. The end aim is that we all get to consume more, the very definition of making ourselves better off.
Worstall's analysis falls apart in that last sentence because who gets to be included in that we and that ourselves is critical. I'm sure that the people Worstall associates with are fairing very well (well, maybe not very well, but well enough given the Republican greed driven crash of 2007 that still echoes through our economy eight years later), but I would suggest Worstall curl up with Barbara Ehrenreich's Nickel and Dimed: On (Not) Getting by in America and become familiar with the other 99 percent. Jeff Hess: Have Coffee Will Write.Walmart, Wal-Mart
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September 1st, 2015
Filed under: Wall Street
Well, not really, I think everyone knew that this shoe would drop, sooner or later as Walmart's Wall Street masters expressed royal displeasure with stock performance. The question now is: will Walmart freeze or abandon completely, future raises announced earlier this year? Writing in Wal-Mart Cuts Some Workers’ Hours After Pay Raise Boosts Costs for Bloomberg News, Shannon Pettypiece reports:
Wal-Mart Stores Inc., in the midst of spending $1 billion to raise employees’ wages and give them extra training, has been cutting the number of hours some of them work in a bid to keep costs in check. Regional executives told store managers at the retailer’s annual holiday planning meeting this month to rein in expenses by cutting worker hours they’ve added beyond those allocated to them based on sales projections. The request has resulted in some stores trimming hours from their schedules, asking employees to leave shifts early or telling them to take longer lunches, according to more than three dozen employees from around the U.S. The reductions started in the past several weeks, even as many stores enter the busy back-to-school shopping period. Chief Executive Officer Doug McMillon is trying to balance a desire to improve service -- partly through increased spending on his workforce---against investors’ pressure to keep profit growing. Labor costs, which rose after Wal-Mart increased its minimum wage to $9 an hour in April, have weighed on earnings, which missed analysts’ expectations last quarter. At the same time, Wal-Mart is trying to maintain low prices to fend off rivals
I'm actually a little sad to reflect that I think Doug McMillon will become the shortest-termed CEO for Walmart as outside forces demand a return to past levels of dividends, and damn the consequences.
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August 31st, 2015
Filed under: Environment,Greenwashing,Walmart Family Foundation
(Previously in WALMART IS GREEN, GREENBACK GREEN... Part I, Part II.) Yesterday I began to examine Naomi Klein's reporting on Walmart's ties to Big Green---the cadre of once-environmental groups perverted by the lure of money and access provided by the worst of the polluters. Klein concludes:
And this is the heart of the issue---not simply that a group that gets a large portion of its budget from the Walton family fortune is unlikely to be highly critical of Walmart. The 1990s was the key decade when the contours of the climate battle were being drawn---when a collective strategy for rising to the challenge was developed and when the first wave of supposed solutions was presented to the public. It was also the period when Big Green became most enthusiastically pro-corporate, most committed to a low-friction model of social change in which everything had to be "win-win." And in the same period many of the corporate partners of groups like the EDF and the Nature Conservancy---Walmart, FedEx, GM---were pushing hard for the global degregulatory framework that has done so much to send emission soaring.
In light of this, consider the international markets into which Walmart has expanded since the '90s---China, Central America, Russia, Africa, India---and compare their environmental regulations to our own. Jeff Hess: Have Coffee Will Write.
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August 30th, 2015
Filed under: Environment,Greenwashing
(Previously in WALMART IS GREEN, GREENBACK GREEN...) Yesterday I began to examine Naomi Klein's reporting on Walmart's ties to Big Green---the cadre of once-environmental groups perverted by the lure of money and access provided by the worst of the polluters. Klein continues:
Nor is the Environmental Defense Fund the only environmental organization to have benefited from the Walton family largess. Their foundation is one of the top green funders, handing out more than $71 million in grants for environmental causes in 2011, with about half of the money going to the EDF, Conservation International and the Marine Stewardship Council. All have partnerships with Walmart, whether to lower emissions, stamp an eco label on some of the seafood the company sells or to co-launch a line of "mine to market"jewelry. Stacy Mitchell, a researcher with the Institute for Local Self-Reliance, observes that having large parts of the green movement so dependent on the scions of a company that almost singlehandedly supersized the retail sector and exported the model around the world has had profound political implications. "Walmart's money is exerting significant influence in setting the agenda, defining the problems and elevating certain kinds of approaches---notably those that reinforce, rather than challenge, the power of large corporations in our economy and society," she writes.
Walmart is the fox in the henhouse. (This three-part series concludes tomorrow.) Jeff Hess: Have Coffee Will Write.
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August 29th, 2015
Filed under: Environment,Greenwashing,Walmart Family Foundation
In the early '90s I was first editor of the Municipal Edition of Recycling Today and was later promoted to Executive Editor of the Recycling Media Group. (A few years later I helped launch and served as Senior Editor for the Crain Communications startup Waste News.) In those roles I had occasion to speak with and interview on the record many national figures in the environmental movement. While I think the odds good that I crossed paths with Fred Krupp, the head of The Environmental Defense Fund, more than once, I do not have specific memories of him. Naomi Klein, however, has a more intimate knowledge of Krupp and the EDF, give them no less than two dozen mentions, several running multiple pages, in her masterwork: This Changes Everything: Capitalism vs. The Climate. One of those examinations, spanning pages 208-210, focuses on the relationship, fueled by more than $65 million, among Walmat, the EDF and the Walmart Family Foundation. Klein writes:
The Environmental Defense Fund has always insisted that it does not take donations from the companies with which it forms partnerships---that, writes EDF vice president for strategy and communications Eric Pooley, "would undermine our independence and integrity." But the policy doesn't bear much scrutiny. For instance, one of the EDF's flagship partnerships is with Walmart, with whom it collaborates to "make the company more sustainable." And it's true that Walmart doesn't donate to the EDF directly. However, the Walton Family Foundation, which is entirely controlled by members of the family that founded Walmart, gave the EDF $65 million between 2009 and 2013. In 2011, the foundation provided the group with nearly 15 percent of its funding. Meanwhile, Sam Rawlings Walton, grandson of Walmart founder Sam Walton, sits on the EDF's board of trustees (identified merely as "Boatman, Philanthropist, Entrepreneur" on the organization's website.) The EDF claims that it "holds Walmart to the same standards we would any other company." Which, judging from Walmart's rather dismal environmental record since this partnership began---from its central role in fueling urban sprawl to its steadily increasing emissions---is not a very high standard at all.
More to follow tomorrow in WALMART IS GREEN, GREENBACK GREEN: II... Jeff Hess: Have Coffee Will Write.
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August 28th, 2015
Filed under: Black Friday
Ho! Ho! Ho! The holiday shopping season starts Friday, 4 September, at Walmart, nearly three months before Black Friday and a whopping 112 days before Christmas. Krystina Gustafson, in Wal-Mart's Holiday Layaway Program Begins Two Weeks Earlier for NBC News, breathlessly tell us"
Wal-Mart shoppers will be able get a head start on their holiday purchases this year, when the world's largest retailer kicks off its layaway program Friday — two weeks earlier than in 2014. The timing shift coincides with the launch of the new "Star Wars: The Force Awakens" merchandise, which goes on sale on Sept. 4. It will also include merchandise tied to the discounter's inaugural "Toy Week" event, designed to drum up excitement in the days prior to the "Star Wars" launch, and give a sneak peak at the holiday's top toys.
I know I'm excited. You? Jeff Hess: Have Coffee Will Write.
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August 27th, 2015
Filed under: Employment,Wall Street
Walmart is a class traitor. That is the core message from an opinion piece in The Wall Street Journal. Headlined More Minimum-Wage Backfires, the unsigned editorial singles out Walmart for threatening the wealth of investors by giving in to the growing minimum-wage movement.
The campaign for higher minimum wages continues to inflict damage on business employees and owners. About the only ones not feeling the pain are the labor unions that back this movement. Meanwhile, in a growing number of U.S. jurisdictions, unions are succeeding in exempting themselves from the laws they seek to impose on everyone else. Wal-Mart announced last week that second quarter operating income was down 10% compared to the same period last year, even as revenue was slightly higher. Wal-Mart, a non-union shop under relentless media pressure to boost compensation, increased its minimum starting wage to $9 per hour in April, $1.75 above the federal minimum. This amounted to a raise for more than 500,000 workers. The company says it is a worthwhile investment that is creating a better, happier workforce and a better customer experience. But—minimum-wage activists, take note—increased compensation costs cannot simply be passed along to consumers at the whim of the company. In conference calls with securities analysts and reporters, company officials made clear that wage hikes are among the factors exerting a negative impact on Wal-Mart’s profits.
This last whine, that increased compensation costs cannot simply be passed along to consumers at the whim of the company, is key. Of course no one with half a brain would expect those costs to be offset by reduced profits! This is America, where profits are more sacred than Christmas. Jeff Hess: Have Coffee Will Write.
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August 26th, 2015
Filed under: Customer Satisfaction,Litigation,Public Relations
Nearly 40 years ago I seriously considered buying an AR-15, the civilian, semi-automatic version of the M-16, but not for varmint hunting. I was a 20-something card-carrying member of the National Rifle Association with an attitude. Good sense prevailed and I spent my $300 elsewhere. Conspiracy aficionados notwithstanding there simply is no good reason to own an AR-15. Nor, for that matter, a semi-automatic shotgun with a magazine capacity of more than six rounds. Hell, on board the Bainbridge, the Security Alert Team only carried Remington 870s with four rounds in the tube. All of that is to say that I agree with Walmart's decision to remove Modern Sports Rifles Assault Rifles and semi-auto shotguns with magazine capacity in excess of six rounds, from store shelves. The vast majority of customers will never notice. A few will, unless the score a bargain. Bob Owens, writing in Walmart Stops Selling MSRs, Some Semi-Automatic Shotguns for Bearing Arms, writes:
Walmart has made the decision to sell out their remaining inventory of the discontinued firearms at closeout prices, and we’ve seen claims on the Internet of some lucky Walmart shoppers picking up Bushmaster AR-15s for as low as $250. [Walmart’s Senior Director for Corporate Communications Kory] Lundberg was unable to substantiate those rumors, but did say remaining firearms that are being phased out are being steeply discounted.
It would seem to me that a better plan would have been to sell the weapons at cost to another licensed distributor rather than give someone like my 1970s self a chance to step up his arsenal. While not mentioned in any of the stories I've read, I have to wonder to what degree the case of Trinity Wall Street v. Walmart played in this decision. Jeff Hess: Have Coffee Will Write.
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August 25th, 2015
Filed under: Charity,Doug McMillon,Employees,Walmart Hunger
thanksgiving 131120 We did what we could here in Cleveland to help the survivors of Hurricane Katrina in New Orleans. Walmart chipped in as well. On the 10th anniversary of New Orleans nearly disappearing, Walmart wants to feel good again and thinks that $5 million dollars a year for five years, spread across the whole globe, is sufficient. Not in my book. The City Wire, in Wal-Mart and its foundation commit $25 million to disaster relief, reports:
Reflecting on the 10 years since Hurricane Katrina devastated the Gulf Coast, Wal-Mart and its foundation committed $25 million over five years to support disaster recovery and resilience efforts worldwide. As part of the commitment, the Walmart Foundation is making an initial investment of $500,000 in grants to select local nonprofits in the U.S. Gulf Coast region. Wal-Mart CEO Doug McMillon made the announcement Friday, (Aug. 21) in New Orleans. “Hurricane Katrina touched our customers, associates, and communities in a profound way, and we haven’t forgotten,” McMillon said. “Working hand in hand with the people of the Gulf Region at that difficult moment showed us there are times when we can make a real difference. Today we’re gathering with leaders in New Orleans to reflect on the progress made since the storm and to make a $25 million commitment to disaster response and resiliency globally. We will continue to help communities prepare for---and recover from---the unexpected,” McMillon said during Friday’s event.
Fair enough, but what about helping the more than 2 million workers who are victims of the expected: Hurricane Walmart that strikes every day in every corner of The United States of America leaving employees to plead for food donations so that co-workers might have something resembling a happy holiday dinner? Jeff Hess: Have Coffee Will Write.
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August 24th, 2015
Filed under: Wall Street
In the bad old days of Soviet-style communism, the path to the workers' paradise was through a state-directed economy and the No. 1 tool for making that direction a reality was the five-year plan. Planning five years into the future is, at best, a hail-Mary exercise. There is simply too many unknowns. Yet, Adam Levine-Weinberg, writing in Wal-Mart's Turnaround Will Take a Long Time for The Motley Fool wants investors to envision a five-year plan for Walmart.
A few years ago, Hewlett-Packard CEO Meg Whitman opined that executing a turnaround for an enormous business typically takes a full five years. Wal-Mart shareholders have recently learned just how true that statement was.
Maybe Whitman was right, but tagging the business executive named by Bloomberg as the No. 1 Most Underachieving CEO doesn't lend confidence to Levine-Weinberg's thesis. Maybe HP did need five years. The problem was that HP didn't have five years. Whitman's problem may be Walmart CEO Doug McMillon's problem as well.
This week, the retail titan reported Q2 earnings that missed analysts' estimates. The company also cut its full-year earnings guidance and significantly slashed its e-commerce growth target for this year. In the past two years or so, Wal-Mart has made some savvy moves to fix its business. However, it will probably take several more years for it to return to sustainable growth.
Does anyone think investors are going to park there dollars in Walmart stock for the next five years on the chance that there's a turnaround in the Bentonvile Behemoth's future? There is a very un-Soviet joke that goes like this: if you want to make God laugh, tell him your plans. Jeff Hess: Have Coffee Will Write.
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