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  • The Associated Press reports that 17 workers at a Wal-Mart Tire & Lube Express in Colorado have asked to be represented by the United Food and Commercial Workers (UFCW), a request to be considered later this week by the National Labor Relations Board (NLRB).

    Wal-Mart is arguing that the 17 workers cannot ask for union certification because they are a small minority of the 400 people who work in the store. The UFCW, on the other hand, argues that the automotive service department employees ought to be considered as a separate unit.

  • In a fascinating piece in online magazine Slate entitled “The Bleeding Beast of Bentonville,” columnist Daniel Gross assesses the possible reasons for Wal-Mart’s less than stellar November and Thanksgiving sales, and projects what this could mean for the coming holiday season.

    Gross notes that “in retail, distribution and low prices only take you so far. At some point, merchandising - selecting the right product mix at the right price at the right time - makes a difference. And in a development that would have seemed heretical a few months ago, serious people have started to question Wal-Mart's retail smarts. James Cramer of today dissed Wal-Mart: ‘The stores are dowdy. The aisles are ugly. There's nothing exciting or different or even colorful at Wal-Mart. It feels almost Soviet in its selection and presentation.’

    “Ouch. The larger issue for Wal-Mart investors and management isn't simply decor. It's existential. Could it be that Wal-Mart has reached the limits of its cheapness? The company's raison d'etre is to function as pass-through between (increasingly foreign) manufacturers and lower- and middle-income consumers. Acting as an agent for its vast customer base, Wal-Mart delivers low prices. But there's a limit to how low the company can go. Wal-Mart's sales didn't grow more rapidly last month in part because it didn't cut prices on promotional items aggressively. At long last, the weaker dollar and higher costs for commodities, raw materials, food, and energy are working their way even into Wal-Mart's ruthlessly efficient supply chain. Ultimately, the higher costs would either have to hit Wal-Mart's shareholders, in the form of lower profits, or Wal-Mart's customers, in the form of less-cheap prices.”

    But here’s the killer line from Gross that caught our eye: “So far this Christmas season, Wal-Mart has sided with its investors.”

KC's View:

We have a couple of reactions to this. First of all, while we find James Kramer to be both insightful and entertaining, we’re not sure we’re buying into his criticism for Wal-Mart’s décor issues. After all, he’s not exactly a stereotypical Wal-Mart customer. That’s not to say that he’s wrong, but just that he may not have his finger on the pulse of what makes Wal-Mart shoppers tick.

That said, we’ve been arguing for a long time that Wal-Mart’s size and the demands of the investor class could eventually team up to cause the retailer problems. And even the perception that Wal-Mart sees investors as its primary customers – as opposed, say, to real customers who actually buy stuff in its stores – isn’t something that the folks in Bentonville will want to find any sort of currency.

But Wal-Mart’s competitors shouldn’t begin breaking out the champagne just yet. The Bentonville Behemoth is a resilient entity, and a bad November could just mean that it is going to have a gangbusters December. Or maybe not.

Our suspicion is that a wounded Wal-Mart would be a very dangerous Wal-Mart.