Okay, here's my Walmart story.
About 18 months ago Wal-Mart wanted to do business with Seventh Generation, offering us a chance to sell to customers we have struggled to reach. There are two distinct schools of thought in the company. One is that we as a company, do a poor job serving middle and low-income people and that to do business with Wal-Mart would open these markets, increase profits and provide a larger piece of the population with environmentally friendly products. Sounds attractive, right? And then, there is the bigger picture.
As a socially responsible business we can't ignore the behavior of all the companies we do business with. I had read that for every job Wal-Mart creates, one and a half jobs are lost in this country as Wal-Mart, in its quest for lower prices, forces manufacturers to move overseas.
And even though Wal-Mart calls this characterization a myth and cites a study from Marshall University that shows that Wal-Mart "increases employment, wages and the number of retail establishments in the markets that we enter and the communities we operate," I still had my doubts.
Then there is always the issue of what Wal-Mart pays its employees. Underpaid workers have to rely on public assistance. We know people can't live on the wages they make at Wal-Mart. Who really subsidizes low costs at Wal-Mart? We do as taxpayers. Of course, Wal-Mart also defends its pay and benefits offerings, saying that their wages and benefits are competitive in each community they serve...
I still wasn't convinced and Seventh Generation said "no" to Wal-Mart. The discussions aren't over, but for now, I think it is the right business decision.
Related Stories: | Topics:Ethonomics, guest host: jeffrey hollender, Wal-Mart Stores Inc., Seventh Generation Inc., Marshall University |
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Recent Comments | 8 Total
April 15, 2004 at 3:33pm by Michael Emmert
Thank you for looking before leaping. Regardless of the hype that Walmart is not hurting anyone. The reality is that they are leading the general public down a road of self destruction while hiding behind a yellow smiley face.
I sold my interest in Walmart two years ago after deciding that although low prices are nice, their stock price is always a safe bet, and dividend disbursements come regularly, the ultimate price is not worth it.
I don't mean to say that Walmart is an intentional Ogre, more likely that their vision did not account for the waterfall of decay that follows undermining everything from wages to product value. Personally I would rather pay an extra fifteen cents for soap, and an additional dollar for a bath towel, than to subject the person who fills the shelf of soap products or towels to public assistance and all it's implications. Not to mention the eventual unemployment Walmart will force the same soap manufacturer and towel maker into after they have leached every last bit of profitability from them.
April 15, 2004 at 3:46pm by david
Thank you for setting a good example of corporate responsibility.
April 15, 2004 at 3:47pm by Peter Rees
"[...] we as a company, do a poor job serving middle and low-income people and that to do business with Wal-Mart would open these markets, increase profits and provide a larger piece of the population with environmentally friendly products."
OK. Does your statement suggest that the affluent need to bring social responsibilty to the less affluent? Is that the business imperative? To be pointed, it sounds like suggesting that well fed people show the hungry how to eat.
How does a volume/big box approach square with the environmental urge to occupy a smaller "foot print", to step gently on this good earth?
Are you with me?
All of which matters more than what the 'guy' next door is doing re. wages etc.
Regards,
Peter
April 15, 2004 at 3:57pm by johnmoore (from Brand Autopsy)
Jeffrey, thanks for being so transparent and sharing your perspective on Wal-Mart.
As we've all read, Wal-Mart wields tremendous power over their vendor suppliers. To do business with Wal-Mart means that a vendor needs to be just as operationally efficient as Wal-Mart is.
That means Wal-Mart vendors need to have a maniacal focus on lowering their costs and to do that ... most organizations need to overhaul their entire business operation from procurement to design to distribution to marketing to shave off any excess fat in order to protect their margins. All this so that Wal-Mart can bring low prices to consumers.
Sure, we as consumers like to get a lower price, but we pay the price because companies are forced to go to drastic measures to bring products to market at the lowest possible price.
I truly believe there is a high price to a low price strategy.
April 15, 2004 at 9:38pm by Karl Dahlquist
Man, when did FC become socialist?
During the grocery worker strike we all jumped in the SUV and bought items that were in rare supply in Southern California. Imagine my shock when I discovered items like deoderant, soap, tooth paste and HALF the price of the grocery stores.
I want them to build a Wal-Mart right down the street from me. Bring them on. I will shop there for everything. Anything to get me away from the whining, sniveling union folks that are still bitter they lost their strike.
April 16, 2004 at 1:07am by Tim M.
Is there ever a solution to a metric that calls for people to make less and then have only the means to afford what in the end has caused the challenge.
Walmart allows the consumer a price point on items that is very competitive and yet the suppliers resort to drastic measures such as offshoring and sweat shop labor to provide Walmart with product...resulting in a slow spiral of degrading challenges that will eventually to what?
What is the solution to a consumers need for a value?
April 16, 2004 at 4:39pm by RN
Wal-Mart is doing to retail what Medicare (and other payors) are doing to healthcare. Because the reimbusment is so low in relation to the cost of providing a current and up to date service, hositals are forced to over work and under pay many of their professionals just to make enough money to keep the doors open.
I am all for innovation and effecient operations, but this is a bad trend in America.