Founded by Sam Walton Headquarters in Bentonville, Arkansas WMT – Stock letters on NYSE Revenue - $378,799,000,000.00 Profit - $12,731,000,000.00.

Wal-Mart

A dirty word?

Founded by Sam Walton Headquarters in Bentonville, Arkansas WMT – Stock letters on NYSE Revenue - $378,799,000,000.00 Profit - $12,731,000,000.00 Stock Price – 10-20-10 - $53.28 High - $63.85 Low - $42.50 Market Cap - $277 billion Shares – 3.9 billion CEO – Mike Duke

Wal-Mart

Wal-Mart – The Bully from Bentonville – How Wal-Mart is destroying the world

The Wal-Mart Revolution

The Wal-Mart Triumph

If Wal-Mart were to open in your town, how would you feel?

Books About Wal-Mart

1.8 million employees $7 billion in weekly revenue $378 billion in annual revenue 3,400 stores 550 Sam’s Clubs Larger then the next 5 largest retailers combined

◦ Home Depot◦ Sears◦ Kroger◦ Costco◦ Target

Facts and Figures

120 million shoppers each week

84% of Americans drive by a Wal-Mart each week

15% of Chinese imports go to WM

China’s 8th largest trading partner

Facts & Figures

Estimated 8% to 39% price reductions due to WM groceries

Only soda sold for less at other stores

WM pushes down prices an avg. of 13%

WM has greater effect in smaller cities

Price Advantages

$40,000 - $45,000 – avg. income for WM shoppers

$60,000 for Target $74,000 for Costco Save $782 per family per year buying

groceries at WM 1.5% of income Country would save $87 billion if everyone

bought groceries at WM

Wal-Mart Shoppers

Closer you live to a WM, the more you save

46% of Americans live within 5miles of a WM or Sam’s Club

67% of stores in U.S. within 5 miles of WM

Wal-Mart Locations

Sells more DVDs than anyone

Largest customer for Disney, P & G, Kraft, Hershey, Revlon & Gilette

Biggest seller of – groceries, guns, toys, diamonds, jewelry, cds, apparel, dogfood, detergents, sporting goods, video games, socks, bedding and toothpaste

Largest film developer and optician

Sales

2-5 businesses close within 5 years of a WM opening

Avg. county in U.S. has over 200 stores Accused of predatory pricing Occasionally uses loss leaders-lose money

on certain items to attract customers Practice legal or illegal? Chain grocery stores were already hurting

mom & pop stores Very low margins in the grocery business

Economic Effects

Keeping WM at bay hurts the consumer

WM expanded into groceries because it was profitable

WM has been sued for its business practices

Most suits settled out of court

Economic Effects

All stores connected by computer, bar codes, and the largest private satellite system

Suppliers are connected as well Items are now being radio tagged to track

them anywhere WM’s size allows them to spread costs and

bargain for cheaper prices WM can modify space to have more toys

than Toys-R-Us at Christmas and reduce toys after holidays

Wal-Mart Productivity

Economies of density – training, distribution and advertising are cheaper when one store opens near another

WM is 40% more productive per worker than competition

Productivity expands the economy WM responsible for 10% of countries

productivity growth in the 90s Key losers are competitors not customers

Wal-Mart Productivity

New stores hire 400 workers or associates Net effect on jobs is hard to calculate People leave competitors to work at WM so

net gain would not be 400 jobs Complaints and lawsuits over wages Despite wages, 8,000 people applied for

500 jobs at new store in Glendale – better odds for a Harvard applicant

Wal-Mart Labor

Employees typically are poorer with less education and few job skills

Median wage in 2001 was $9.00 vs. $8.34 for the country

Labor market is competitive for workers in the WM labor pool

WM typically draws employees from lower income areas

Wal-Mart Labor

No WM is unionized vs. 6% of the competition Stiff anti-union tactics Switched to prepackaged meats when

meatpackers tried to unionize 2005 closed a store in Quebec that voted in a

union In both cases courts ruled against WM Sued in 30 states for off the clock work 2006 PA workers awarded $78 million Sued for no break and subcontracting with illegals Competitors have been sued as well

Wal-Mart Labor

WM benefits are considered stingy WM benefits are higher than the rest of the

industry Many employees are poor and have govt.

health plans

Wal-Mart Labor

Traffic congestion Too much development Tax incentives for development Refuses to sell some products

◦ Magazines◦ Recordings◦ Morning after pill

Wal-Mart Concerns

http://walmartstores.com/Sustainability http://investing.businessweek.com/research

/stocks/people/people.asp?symbol=WMT http://investing.businessweek.com/business

week/research/stocks/people/person.asp?personId=313059&capId=313055&previousCapId=313055&previousTitle=Wal-Mart%20Stores%20Inc.

Links

1,000’s of lawsuits Most are class action suits for unpaid wages Other examples

◦ Detained for shoplifting◦ Bathroom mess◦ Slip and falls◦ Wrongful termination◦ Sexual harassment◦ Disability not accommodated◦ Fell off break chair

Wal-Mart Lawsuits

Sam Walton worked at J.C. Penny Bought a Ben Franklin – lost his lease Bought a 5 & 10 Opened 1st store in 1950 Sought better terms from suppliers and

passed savings to customers 1962 – 11 stores

Wal-Mart Founding

Must be efficient to supply Wal-Mart Just in time inventory WM is cutting suppliers by developing their

own brands (Sam’s Choice)◦ Sell detergent for ½ price of Tide◦ Old Roy now outsells Purina◦ WM can cut out middleman and negotiate directly

with China and others

Wal-Mart Suppliers

Economists as a whole say savings to consumers outweigh costs

Most complaints are by competitors and about low wages and poor benefits

Americans have a love/hate relationship with Wal-Mart

Conclusion