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2007-03-10
New York, NY. Citizen Groups Blocked 47 Wal-Mart Superstores Last Year

A securities analyst for the Bank of America says Wal-Mart is spending $10 million a year in staff salaries and benefits to fight off union-based attacks on its proposed stores. According to an article in the Wall Street Journal, the opponents of Wal-Mart are having a "meaningful" impact on the retailer's production of new stores. Wal-Mart downplayed the Bank of America report. "Union leaders are wasting millions of their members' hard-earned dollars every year attacking Wal-Mart," a Wal-Mart spokesman said. "Published reports and our own internal tracking consistently show that the critics' efforts are having minimal impact on the company's reputation." Bank of America analyst David Strasser said that union groups are spending $20 million in their campaign against Wal-Mart. But Wal-Mart, for its part, has 100 people working to counter the grassroots efforts against the retailer. Wal-Mart said that estimate was "simply absurd," yet the analyst made no attempt to calculate the much larger cost to Wal-Mart of lost sales from stores delayed. "This union fixation has cost Wal-Mart real-estate sites in key locations, adversely impacted [same-store] sales to some degree, and has distracted management from focusing on its retail strategy," Strasser said in his note to Bank of America clients. Wal-Mart "same store sales," which are a key indicator of retail strength, has fallen by more than half in recent years. Same store sales (those stores open at least a year) at Wal-Mart averaged 11% for the period 1988 to 1993, compared to 5% for the period 2000 to 2006. In 2006 and 2005, same store sales increases were only 3%. The Wall Street Journal singled out Wal-Mart Watch, an independent organization backed by the Service Employees International Union, and WakeUpWalMart.com, supported by the United Food and Commercial Workers Union, as the two groups most aggressively pressuring Wal-Mart. Strasser's note to clients cites the "anti-sprawl group Sprawl-Busters" and the Change to Win union consortium in reporting that development of more than 45 Wal-Mart stores in the U.S. was blocked last year, up from nearly 20 in 2000. Wal-Mart did not refute Sprawl-Busters' numbers, but said the company "continued to open many stores this past year, many in new markets, throughout the country." Wal-Mart released its own survey this week that concluded nearly nine of every 10 shoppers stops at a Wal-Mart, at least sometime. The survey also showed that 14% of American consumers are "conscientious objectors" with little loyalty to Wal-Mart. The survey was paid for by Wal-Mart. It found that 89% of Americans shop at Wal-Mart, 11% don't. Wal-Mart says their internal survey determined that less than 1% of people who avoid Wal-Mart, do so because of negative publicity. A similar study by McKinsey in 2004 found that between 2% and 8% of Wal-Mart shoppers had stopped shopping there because of negative reputation. Wal-Mart defines "conscientious objector" as someone who bases their purchases on a company's practices, such as charitable giving or environmental measures.

What you can do: The new Bank of America report is the second such analysis in recent years on how Wal-Mart opponents are hurting the company. On May 20, 2005, Sprawl-Busters presented a report called "Not in My Backyard: An Analysis of Community Oppposition to U.S. Big Box Retail," produced by Bernstein Research Call, based in New York. That report said Wal-Mart faced a growing stock concern caused by the high-level of opposition to the company's new stores. The Bernstein report was based in part on an interview with Sprawl-Busters. "Local opposition has successfully squashed numerous plans among the big box players in different parts of the country. Many communities are adopting size limits on store size that fall below the average size of these retailer's stores. Most of the opposition has been concentrated in California, Texas, Florida and the Northeast, exactly where the highest growth opportunities lies for these companies." The investor advisor went on to warn shareholders that "events are showing that big box retailers may face increased difficulty expanding into their most sought after markets." Bernstein noted that "heightened resistance could negatively impact these retailers by slowing their square footage growth rates." The Bank of America study fails to mention that every Wal-Mart superstore stopped or withdrawn costs the retailer $100 million in lost sales at that location. According to Sprawl-Busters data, in 2006 there were 47 superstore projects that were either stopped outright by citizen groups, or withdrawn by the company as a failed location effort. That's $4.7 billion in lost sales due to community opposition. That's huge, even by Wal-Mart standards.















 
 
"Norman has become the guru of the anti-Wal-Mart movement" ~ 60 Minutes

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