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Wal-Mart to Chinese suppliers: Get green

Wal-Mart Stores, Inc. (NYSE: WMT) wants its massive cadre of Chinese suppliers to become more "green" in their operations. Since Wal-Mart CEO Lee Scott is apparently hell-bent on his retailer becoming the most ecologically-conservationist company in the world, this is a move that should have come in 2006, to be honest. Is it just lip service, or does Scott really intend to tell his Chinese suppliers how to conduct their own internal business?

Reducing waste and emissions is the push here. Wal-Mart is already requiring retailer consumer packaging waste reductions along with a whole bevy of other green initiatives, such as making more energy-efficient products and packaging that is more easily recyclable. In fact, Scott has said that he's like to have a company that produces no waste and gets its energy from renewable resources in the future. Those are quite lofty goals from a sprawling organization like Wal-Mart.

Scott will also be tackling the issue of appropriate disposal of waste within Chinese vendors who supply to the world's largest retailer -- a back-end type of initiative that is every bit as important as retail packaging initiatives. Although Scott indicated it "would take a long time" for these green moves to happen within in Chinese suppliers, the faster the better. As Wal-Mart moves more heavily into the rapidly-growing markets like China and India, a new wave of international growth is building under Scott's watchful eye. Requiring suppliers from its largest trading partner -- China -- can't come soon enough.

Wal-Mart Canada rolls back prices on thousands of items for March

Just in time for the Easter holiday, Wal-Mart Stores, Inc. (NYSE: WMT) will be rolling back thousands of prices to lure shoppers into stores for that special event shopping visit. This time, though, it's Wal-Mart's Canadian stores that will be rolling back the prices on hundreds of store shelves at each location.

The Easter holiday falls in March this year, as well as "Spring Break" for many kids (and many parents who scheduled vacations as well). As such, the mode to capitalize on a portion of this month certainly was not lost on the world's largest retailer. So, Wal-Mart will be promptly lowering prices on over 3,500 products in its Canadian stores due to Easter being the third-largest holiday shopping day of the year.

With Easter falling on the earlierstdate than in almost 200 years, this seems like a unique merchandising opportunity for any retailer. A fact that Wal-Mart recognizes is that two shopping dates -- Easter and Spring Break -- are so close to each other that it could press the wallets and purses of financially-strapped shoppers. The "price rollback" to the rescue, though. Wal-Mart's du-jour policy of competing mainly on price won't be taking a break this year.

The Wal-Mart Weekly: Checking out the retailer's unfiltered blog

Welcome to the 52nd installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

In this week's Wal-Mart Weekly, I'll be looking at the retailer's entrance into the world of open and frank communication with the world at all levels. Wal-Mart Stores Inc. (NYSE: WMT) appears to be allowing some of its purchasing and merchandising employees to blog openly about products in the categories they procure for all Wal-Mart's store locations.

It would seem this is a touchy area, since allowing unfiltered blogging (bad and good) about products sitting on Wal-Mart shelves would not only get some vendors and suppliers charged up, but turn away sales to some potential customers as well.

Continue reading The Wal-Mart Weekly: Checking out the retailer's unfiltered blog

The Wal-Mart Weekly: Processing customers more efficiently

Welcome to the 45th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week, I took a look at Wal-Mart Stores, Inc. (NYSE: WMT)'s effect on the communities in which it operates. Wal-Mart's effect on local, state and the national U.S. economy has been well documented. A recent analysis out of Minnesota concluded that Wal-Mart was better for the American retail landscape as opposed to worse. Opinions are all over the place on that one, and I referenced a few last week.

So, this week I will take a more down-to-earth, nuts and bolts problem many Wal-Mart customers experience every day. That is, grocery and general merchandise inventory levels (or lack of) and access to a speedy checkout. After all, we're all in a hurry -- right?

Continue reading The Wal-Mart Weekly: Processing customers more efficiently

Predicting recession, Goldman recommends Wal-Mart, Costco

Goldman Sachs indicated yesterday that a "mild" recession may be coming to the U.S. in the middle of 2008. The recession will cause a consumer spending slowdown that will drive more customer traffic to low-price stalwarts like Wal-Mart Stores, Inc. (NYSE: WMT) and Costco Wholesale (NASDAQ: COST).

Goldman Sachs analyst Adrianne Shapira noted that a "second-half margin recovery could be at risk if retailers do not plan prudently enough." So the question is this: will consumers flock to the safe haven of low prices as a defense against higher inflation and a recession? Of course they will. As reported this morning, 2007's inflation rate was the highest in 17 years.

Shapira went on to say that sales and margins at department stores will be the hardest hit, with EPS declines to the tune of 23% in some cases. Should this cause you to dump shares of JC Penney Co. (NYSE: JCP), Kohl's Corp. (NYSE: KSS) and Dillards, Inc. (NYSE: DDS)? For long-termers, no. But be prepared for a bumpy ride as consumers flock to the cheapest of the cheap retailers.

The Wal-Mart Weekly: How Wal-Mart affects communities and economies

Welcome to the 44th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week, I peered into Wal-Mart Stores, Inc. (NYSE: WMT)'s stance on digital content delivery. As in, music and movie downloads from the retailer's website. Wal-Mart quietly shut down its movie download service just recently on the auspices that Hewlett-Packard Company (NYSE: HPQ)'s backend technology was no longer going to be supported.

It seemed odd that the world's largest retailer would launch a movie download service and not have some kind of guarantee of future support from its partners. But, after just a year, the movie service was shuttered.

This week, the gears will be switched a bit and I'll be looking at some of the more recent arguments on Wal-Mart's effect on local communities. There are arguments on both sides (naturally), and a recent piece from fedgazette looked at Wal-Mart's position as a community destroyer (or supporter, if you have time to look at both sides of the issue).

Continue reading The Wal-Mart Weekly: How Wal-Mart affects communities and economies

Wal-Mart buys entire Sumitomo stake in Seiyu supermarket chain

Wal-Mart Stores, Inc. (NYSE: WMT), which has been on a share-buying rampage in the last month or so in procuring publish shares of struggling Japanese supermarket chain Seiyu, now has another collection of shares in its pocket.

Japanese trading house Sumitomo Corp. has announced that it will sell the 6.37% stake it has in Seiyu to Wal-Mart, as the world's largest retailer almost completely concludes its quest to own every public share of Seiyu. Wal-Mart needs an international market that it owns to work as U.S. growth slows and investors start clamoring for more from the retailer. Wal-Mart shares have staggered at near the same level for over five years.

While Japan is the world's second largest market after the U.S., perhaps Wal-Mart will put a whole load of new resources into that country to ignite growth there and pacify investors who have looked down on Wal-Mart's U.S. business model in the last few years. Seiyu, though, has done horribly in the last half-decade, losing money for six straight years. Wal-Mart has a lot of work to do to right those performance figures, and it won't be easy -- even for the world's largest retail chain.

Wal-Mart and Salvation Army join forces again

Wal-Mart Stores, Inc. (NYSE: WMT) will be fully supporting the Salvation Army this holiday season on the heels of last year's tremendously successful bell ringing campaign. If you've visited a Wal-Mart store this week, you've probably seen the bell ringers for the Salvation Army perched outside the entrance. Last year, over $30 million was raised outside nationwide Wal-Mart and Sam's Club stores.

Wal-Mart does receive a fair amount of flack in the media related to employee pay and benefits, but always seems to offset it here and there with notes of its charitable giving. Although this effort has little to do with Wal-Mart's effort beyond allowing bell ringers outside its stores, it's still admirable in the face of a politically correct population which believes every citizen (and non-citizen) should be treated equally in every possible way.

Do you support the Salvation Army when holiday time comes around, or do you argue that fifteen other needy organizations should be allowed to ring bells for donation as well? Wal-Mart CEO Lee Scott, love him or hate him, stated that "Our associates and customers, who are some of the most generous in the nation, have provided tremendous support to The Salvation Army over the years...we consider the organization to be one of our closest, most important partners, and all of us at Wal-Mart are looking forward to the sound of bells ringing at our stores and Clubs once again this season."

That's pretty straightforward and not surprising from a conservative-driven retail chain -- one that happens to the be largest in the country and world. But, my question to you as a consumer is this: do you support Wal-Mart's position here?

Wal-Mart Mexico sees banking operation profit in four years

Wal-Mart Stores, Inc. (NYSE: WMT) has a winner in its Wal-Mart de Mexico operations, as sales growth in that country has outshined that of U.S. operations for quite a while now. Indeed, the world's largest retailer said that it expects the banking unit of Wal-Mart de Mexico to become profitable by the fourth year of operations.

Wal-Mart de Mexico, or Walmex as it is affectionately known, launched its Banco Wal-Mart during November with one location in Mexico City and three other locations in Toluca. Since Wal-Mart did not have much luck opening a retail banking operation in the U.S., perhaps it has closed down efforts domestically to concentrate on foreign banking operations? That would certainly be an obvious interpretation here.

Wal-Mart's combination of retail commerce and consumer banking could be seen by some as a pair that just does not belong together. From one angle, it gives too much power to a single entity over consumer spending and saving. But then again, the environments and government regulations change per country, so why shouldn't Wal-Mart have retail banking operations in Mexico? Is Wal-Mart trying to shore up revenues from the non-retail side of things outside the U.S.? Of course, and with Walmex's banking hours of evenings and weekends, it may just have the moxie to do well there.

Wal-Mart's Q3 earnings wrap-up

Wal-Mart Stores, Inc. (NYSE: WMT) reported Q3 earnings before the bell this morning, and the world's largest retailer bested Wall Street estimates as quarterly profits rose 8% on improved U.S. performance and growth in international markets. The operative words in that previous sentence, however, are "improved U.S. performance." That's the big fish many analysts were hoping for.

Net income for the Q3 period rose to $2.86 billion from $2.65 billion a year ago, while earnings per share grew to $0.70 from $0.63. Total revenue grew to $91.95 billion from $84.47 billion a year ago as well. And, almost hitting double digits, Wal-Mart's net sales rose 9% as well from the year-ago quarter. International growth was responsible for a decent portion of that sales growth, with 16.9% year-over-year growth, while domestic sales rose 6.4% from the same period. Is that a decent figure or not? Based on the hellish conditions 2007 has brought on, from energy prices to housing market stagnation to dry credit holes from lenders, it's impressive.

Continue reading Wal-Mart's Q3 earnings wrap-up

The Wal-Mart Weekly: Chinese suppliers balk at low prices

Welcome to the 35th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week, I looked at the possibility of Wal-Mart Stores, Inc. (NYSE: WMT) offering an expanded online grocery ordering and home/business delivery service. From coast to coast, there really is not a nationwide solution to this right now, although several valiant attempts in the past (like Webvan) have failed.

This week a hot-button issue will be discussed: are Wal-Mart's prices becoming so low that the many Chinese-based suppliers that supply all those goods to the world's largest retailer may have future problems making money themselves? It's odd to hear that Chinese companies are starting to say that Wal-Mart's prices are too low for them to make a decent profit. If it's true, then a pricing revolution within the retailer may be on the horizon.

Continue reading The Wal-Mart Weekly: Chinese suppliers balk at low prices

Wal-Mart, others ready sub-$200 HD-DVD player for holiday season

Some large retailers may be trying to re-invent an old favorite into this season's "Must-Have" consumer electronic product. HD DVD, which provides much better picture quality, enhanced features and more to the largely maturing DVD market will hit a new low this holiday season, as the nation's largest retailer, Wal-Mart Stores, Inc. (NYSE: WMT) has already begun marketing a new HD DVD player for $198 -- quite a price drop from the $300 and $500 regular prices for many current standalone HD DVD players.

But, Wal-Mart is not the only one -- others like Circuit City are getting in on the action, too. In fact, the $197.99 price point offered at the consumer electronics retailer along with the same price at online retailer Amazon.com (NASDAQ: AMZN) beats Wal-Mart's price by a penny in what appears to be an initial attempt at holiday price wars. Too bad this is a product that most consumers couldn't care less about in the first place.

But, they may care when the price gets to a certain low point, and the sub-$200 area does get there. If HD DVD gets to the sub-$100 price in the next year, consumers will care about "enhanced, high-definition video" just because of the price. My straw poll indicates that most consumers are perfectly happy with progressive-scan DVD players -- which now retail for $50.

The Toshiba player in question was released earlier in 2007 with a $500 retail price, but has seen price chops all year long (Amazon recently sold it for $230), and now this old inventory is being unloaded at fire sales prices probably just to get the newer hardware format into consumer hands. How convenient that the holiday season is just around the corner!

Wal-Mart and Bharti partnership seen as profitless for up to five years

Wal-Mart Stores (NYSE: WMT) announced this year that it would be partnering with Indian retail company Bharti to establish itself in that booming market in the wake of international failures in both South Korea and Germany in 2006.

India and China are two markets where the world's largest retailer needs an instant presence apparently, and instead of going it alone this time, the retail giant is partnering with established, in-country players to ensure its success.

But if it's instant success the retailer wants, it won't come in the way of profits. Bharti's chairman this week noted that high rental costs in India will likely force the Wal-Mart partnership to post losses for the first four to five years in that country -- probably not something Wal-Mart needed to hear. It's hard to imagine commercial rental prices being high enough to damp profits on a burgeoning venture like a Wal-Mart partnership, but according to Bharti that is precisely what will happen, as the rental situation is being described as a "dilemma."

However, it's not that Wal-Mart is opening stores on every corner in India or anything -- the retailer plans to open 15 facilities over the next seven years in the 50:50 retail joint venture, with sizes ranging in the 4,500 square meters to 9,000 square meter space. That's tiny compared to existing U.S. Supercenters, so Wal-Mart's strategy here is apparently to start small and grow like the dickens at the most appropriate time. If Wal-Mart hoped to make up for slowing sales in the U.S. with sales from its Indian venture, that probably won't cut it. My perception is that China is the larger short-term opportunity here.

Wal-Mart opens 36 new stores in October; 163 so far in 2007

Wal-Mart Stores, Inc. (NYSE: WMT) announced this week that it had completed the opening of 36 new stores and wholesale clubs across the U.S. for the month of October. This could be seen as a PR effort to trumpet the new jobs these locations have created in several nationwide communities.

Indeed, Wal-Mart stated that 10,800 new jobs will be available for new associates in these just-opened locations, along with an additional 4,300 new associates having been hired to fill positions at expanded and relocated stores nationally as well. Well, for a company that has publicly said that it will slow down store growth to make existing stores more profitable and temper market saturation, it's hard how to read this news outside of the "job creation" angle. Perhaps there's not one.

As one would expect by now, Wal-Mart COO Bill Simon worked in the retailer's corporate motto by stating that these new locations would be "helping our customers nationwide save money so they can live better." With the holiday shopping season arriving and home equity borrowing slumping due to shrinking home sales, those words carry more weight now than at anytime this year.

The new stores are spread across 22 states, from Oklahoma to Florida. Since February of this year, the world's largest retailer has opened 163 new Supercenters and 19 Sam's Clubs, among other store formats. Job creation count? 61,500, according to Wal-Mart.

Wal-Mart cracks down on Black Friday ad leaks

Wal-Mart Stores, Inc. (NYSE: WMT) is cracking down this holiday season when it comes to the famous "Black Friday" sales that happens the day after Thanksgiving. Black Friday is widely considered to be the busiest shopping day of the entire year and it's when many retailers go into the black for the year -- in other words, they become profitable on that day.

In recent years, newspaper ads from Wal-Mart and other large retailers have found there way onto the internet weeks before the ads are supposed to be available, enabling people to find out about these Black Friday sales quite a bit before the retailers want to announce them. Last year alone, I found scanned newspaper ads all over the place on the web, with large collections found at consumer forums like FatWallet.com, bfads.net and GottaDeal.com.

This year may be a bit different as Wal-Mart's legal team takes a more proactive approach. Their message to websites and forums which are considering displaying Wal-Mart's Black Friday ads before Thanksgiving: don't do it. The retailer's legal team is rounding up the usual suspects early this year, telling them that displaying the retailer's ads before their official November 19 release date violates copyright laws (among other things). Will threats curb the amount of Black Friday newspaper ads we'll all see come Thanksgiving? I suspect that it may cut down on their availability, but I doubt it will eradicate them entirely from the internet.

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Last updated: July 24, 2008: 07:55 AM

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