Wal-Mart Offers Money Back Guaranty on Produce

 

 

By Jessica Wohl

 

(Reuters) - Wal-Mart Stores Inc said on Monday it is offering a money-back guarantee on the fruits and vegetables it sells at its Walmart U.S. stores as it tries to gain more ground in the grocery business.

Walmart is the largest grocer and seller of produce in the United States. It has already lowered prices on produce as it tries to get its shoppers, many of whom are on limited budgets, to buy more healthy fare. Now, it is working on getting fresher produce to its stores more quickly and training its staff to do a better job of selling the goods.

Walmart is able to cut the time it takes to get produce into stores by buying directly from growers and relying on its own distribution centers and trucking systems. It has produce experts working with farmers in key growing regions and aims to double its sales of locally grown produce by December 2015.

Buying more local produce and cutting supply chain costs have helped Walmart keep a lid on prices, which has been key in its push to stay ahead of rivals that include traditional grocers such as Kroger Co and drugstores such as Walgreen Co. Walmart started to see sales gains in produce earlier this year after it began making improvements in produce handling.

Other chains, such as Safeway Inc and Texas' H-E-B, have already offered guarantees on their produce, but Walmart's push will be the biggest as it is the nation's biggest retailer.
Walmart customers not satisfied with the produce can bring their receipt back to the store for a refund. Walmart said the shoppers will not need to bring back the produce to qualify.

To ensure that fresh produce makes it to the stores, Walmart said unnamed third-party service providers will do weekly checks in more than 3,400 of its stores selling produce. Walmart said it would benchmark itself and its competitors week over week.

Walmart also said it recently began a produce training program for 70,000 employees. Store managers, market managers and produce department managers are set to learn more about handling fruits and vegetables. Quality guides for workers will illustrate how to identify top produce, the company said.

Grocers, restaurants and food makers are under pressure from consumers and public health officials to sell more healthful food in an effort to address the nation's obesity crisis. More than two-thirds of adults and nearly one-third of youth aged 2 to 19 are overweight or obese, according to the Centers for Disease Control and Prevention.

Food is a huge business for the world's largest retailer, which has been lowering prices, along with its healthier makeover, to boost sales. Groceries, from food and drinks to cleaning products, accounted for 55 percent of Walmart U.S.'s $274.5 billion in sales in the latest fiscal year.

(Reporting by Jessica Wohl in Chicago; editing by Gunna Dickson)

Wal-Mart Plasters Stores to Stay In-Stock

Empty spots for razors are seen inside a Wal-Mart store in North Dakota on March 13, 2013. Photograph: Corbis

Wal-Mart Stores Inc. (WMT) is turning up the pressure to keep its shelves adequately stocked by proposing to tie executive compensation to the issue -- and has asked an outside auditor to alert workers which items to focus on by plastering U.S. stores with neon green dots.

4:08

May 24 (Bloomberg) -- Bloomberg’s Renee Dudley reports on the struggles with stocking shelves at Wal-Mart and their green dot solution. She speaks on Bloomberg Television's "Market Makers." (Source: Bloomberg)

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Wal-Mart Plasters Stores With Green Dots to Stay Stocked

Andrew Harrer/Bloomberg

 

Grocery items sit inside a cart at a Wal-Mart store in Alexandria, Virginia.

 

Earlier this year, Bloomberg News reported that Wal-Mart had trouble keeping its stores stocked as it cut back on workers per store. That has cost sales and driven away frustrated shoppers. In April, Acosta Inc., a Jacksonville, Florida-based consulting firm, began the green-dot program in Wal-Mart’s U.S. stores after previously conducting shelf audits without telling workers what items would be monitored.
The effort Wal-Mart (WMT) is expending to fix its stocking issues is notable for a chain that became the world’s largest retailer in part by gaining mastery over its supply chain and logistics.
“It’s like Tiffany’s falling down on quality,” said Wallace Hopp, associate dean of faculty and research at the Stephen M. Ross School of Business at the University of Michigan. “It’s the core of their essence. If you can’t manage inventory in retail, then you can’t manage retail.”
On May 16, Wal-Mart (WMT) reported that same-store sales in the U.S. fell 1.4 percent, the first drop after six straight gains. The Bentonville, Arkansas-based company also said second-quarter earnings per share will be $1.22 to $1.27. Analysts projected $1.29, the average of 24 estimates compiled by Bloomberg. The shares rose 1.3 percent to $77.31 at the close in New York.
The compensation proposal was submitted by Wal-Mart to shareholders in April, to be voted on until the company’s annual meeting June 7. On-shelf availability -- known as OSA -- would be one of several new metrics by which managers and executives could be judged.

Calculation Mystery

While Wal-Mart regularly cites OSA figures to investors, the company has declined to say how it has calculated those rates in the past -- although Acosta figures are at least part of them -- or how it would do so in the future. The Acosta audits focus on about 700 important items, which makes it easier to achieve a higher percentage of in-stock merchandise than if the whole store were counted. Wal-Mart supercenters carry about 142,000 items, according to the company’s website, so a typical Acosta audit represents about one half of 1 percent of a store.
It’s important to know how OSA data are derived so investors can track progress, said William Atwood, executive director of the Illinois State Board of Investment, which holds about 98,000 Wal-Mart shares.

Investment Decisions

“We want to make sure the data is precise and objectively derived, whether for investment decisions or for compensation decisions,” he said.
Carol Schumacher, a Wal-Mart vice president of investor relations, said in an analysts’ call last week that on-shelf availability in the first quarter was in the 93 percent to 95 percent range.
“Management is focused on OSA to drive sales,” she said.
It’s not clear how Wal-Mart derived that figure -- and that is where the story of the green dots comes in.
Wal-Mart audited its on-shelf availability in-house for years, said David Tovar, a company spokesman. In 2011, it hired Acosta to do the job.
Keeping shelves stocked can boost sales significantly, according to Acosta, whose clients have included Target Corp. (TGT), Whole Foods Market Inc. (WFM) and ConAgra Foods Inc. (CAG)
“In a superstore, if we fix a void at the beginning of the month, one single SKU in oral care translates to about $360,000 in sales at the end of the month,” Erick Kritsky, Acosta’s director of application development, said in a 2012 study. He didn’t specify a particular item.

Secret Audits

When Acosta began its Wal-Mart audits in 2011, it conducted them secretly, without telling store managers which items were being monitored or when. Each week, Acosta field auditors searched for a random list of 300 items out of 700 being monitored, according to a copy of Acosta’s rules at the time. They compiled data collected from most of the more than 4,000 Wal-Mart stores in the U.S.
Acosta was so committed to secrecy that when some Wal-Mart managers tried to influence the results by finding out what items were being monitored, Acosta managers told their employees to rebuff them and report such incidents, according to internal e-mails.
In an e-mail to auditors sent in May 2011, Ashley Dixon, an Acosta coordinator handling part of the project, said auditors should notify Acosta management if asked “to print or make a copy of the items you are checking so that they can prepare before your next visit” or “if anyone in the store attempts to adjust your audit information in any way.

Management Influence

‘‘This is extremely important,’’ she said. ‘‘We are taking management influence very seriously.’’
Kathy Caldwell, an Acosta executive vice president and Wal-Mart team leader, called the OSA auditing system ‘‘best-in-class.’’
‘‘Acosta has had an excellent partnership with Walmart for more than two years,’’ she said in an e-mail.
Wal-Mart seemed pleased with the audits. On a February 2012 earnings call, Bill Simon, chief executive officer of Wal-Mart’s U.S. operations, told investors that the company’s use of weekly ‘‘third-party physical audits” allowed executives to “see what customers see in their store.”
He said the company had “made great progress throughout the year” in improving on-shelf availability and was achieving rates in the mid-90 percent range.

Audits Stopped

After a while, the Acosta audits stopped. Then, earlier this year, following Bloomberg News reports of stocking issues, Wal-Mart asked Acosta to start monitoring the shelves again.
“Due to Walmart receiving a lot of negative press regarding their empty shelves, we are reinstituting the On Shelf Availability project,” Dixon said in an e-mail to her employees on April 22.
Acosta’s standard secret audit was almost under way when plans changed suddenly. Tovar, the company spokesman, said Wal-Mart decided that, in this case, it would be better to have Acosta mark the items to be monitored with neon green stickers next to the prices on shelves.
“We thought by not letting the stores know, that we would get a clearer picture, but that wasn’t the case,” Tovar said. “What we learned is it’s actually better to have transparency with stores so they know the key items that particular time of year.”

Boxer Briefs

Wal-Mart prepared a spreadsheet of more than 800 items -- merchandise that included peanut M&Ms, Hanes boxer briefs, Covergirl mascara and Crest toothpaste -- that needed “stickering.” The circle stickers would indicate to Wal-Mart workers which items Acosta would be searching for during its audits.
Tovar said the most recent round of auditing was “the first time the green dots were in place.”
He added: “The reason we went to the green sticker process is because we think this is going to help the store associates do a better job of being in stock in key items. Those are the most important items to be in stock on.”
Counting just the key items generates an incomplete picture, Hopp said.

‘Short-Sighted’

“If they green-dotted for the purposes of the audit, that’s short-sighted,” he said. “They should be much more concerned about having stuff in stock in the whole store.”
The process of putting stickers on the shelves of hundreds of products in thousands of stores delayed the auditing project. To make sure all the stores were “dotted” before audits began, some Wal-Mart employees were enlisted to help.
Managers at a Wal-Mart supercenter in Sarasota, Florida, told several workers to start putting green stickers next to merchandise that needed to be in stock, said Stu Ruzbacki, who stocked shelves at the store until this month.
“The store manager just picks someone from each department to put them up,” said Ruzbacki, who was fired after a dispute with his boss. “They pulled one from my team. He could be putting stuff on shelves. Instead, he’s putting stickers up all day.”
In a telephone interview on May 17, Matt Davis, who works as a cashier at the Wal-Mart in Putnam, Connecticut, said most of the items that have green stickers “were in stock, or overstocked, while shelves were empty around them.”

Does Wal-Mart Need to Re-think Its Grocery Strategy?

Recently, there have been several articles about Walmart’s challenges with keeping its shelves stocked in general and grocery items in particular. This front page article in the NY Times Walmart strains to keep grocery aisles stocked does not reflect well on Walmart’s capabilities in the grocery business in particular.
Walmart entered the grocery market in 1988, realizing that frequent trips by grocery shoppers could help improve traffic. For some history, Walmart’s share of the grocery market in the United States now stands at 25 percent. That’s up from 4 percent just 16 years ago.

Grocery made up 55 percent of Walmart’s United States sales in 2012, flat from the previous year. The company’s grocery prices are usually about 15 percent below competitors’, according to Supermarket News. According to the editor Mark Hamstra “Walmart does well in dry goods, but fresh food requires more manpower to stock and rotate goods, involves more waste and is a higher-cost operation.”

Many blame these issues on cuts in labor in the stores and that could well be part of the problem, but to us Walmart's challenge seems to be a lack of understanding of the different customer value proposition of fresh produce.

Walmart’s traditional customer value has been “Every day low pricing” and it has built a spectacular supply chain around it with many unique innovations and investments. According to Operations Rules page 7 “Walmart has built its reputation as the brick and mortar master retailer by focusing on squeezing cost and increasing efficiency in its supply chain, thus providing its customers with competitive pricing but not necessarily with extraordinary service.”

However, fresh grocery buyers look not only for the lowest cost, but also for freshness and attractiveness of the produce they will eat and feed their families. This shifts the customer value to areas where Walmart is not as strong. And in fact, “According to the notes from the Walmart meeting last month in Orlando obtained by The New York Times, while Walmart has 20 percent of the market share in dry grocery, it has 15 percent in fresh (areas like produce, meat, deli and bakery). Safeway customers are 71 percent confident in its fresh produce, the notes said, while Walmart customers are 48 percent confident in Walmart’s produce.”

According to the NY Times article, Walmart is planning to address these issues with a new inventory management system as well as changing shift responsibilities so fresh food is not stocked overnight and goes out at 10 a.m., not 7 a.m. Also, Walmart will add secret shoppers to check on produce quality weekly, and add “would I buy it?” guides for employees.

Walmart is not the only company struggling with this transition. We see this quite often with companies entering new markets or channels and not realizing that they need to change the way they operate to match the needs of these new ventures. One such example is Dell, known for its innovative configure to order manufacturing that matched its direct business model. Dell was known as a leader in high inventory turns, short response time and negative cash conversion cycle. When it entered the retail channel at the beginning of 2008, using the same strategy became a challenge in a competitive push driven environment. Dell tackled this challenge through understanding its customer segmentation, reducing complexity and creating a new logistics strategy to address the new environment. To read the full Dell case study, click here.

Therefore, we would recommend that Walmart rethink their operations strategy as it relates to selling fresh produce. It would help to study successful fresh food retailers and incorporate some of their know how. By incorporating the appropriate practices and staff levels while accepting that they need a different strategy from dry goods, Walmart can make the fresh groceries sector a success.

 

Bad News for Wal-Mart's Future?

Excerpted from AOL Jobs.

Wal-Mart (NYSE:WMT) tried to put a positive spin on its disappointing earnings report Thursday, which showed declining US sales. But a survey released Friday contains another bad sign for America's wealthiest company and largest employer: Just 38% of employees think Wal-Mart's business outlook is good.

The report from Glassdoor.com, the employment review website, looked at people's expectations for their employers for the coming six months. Wal-Mart didn't perform significantly below average, but it got a lower score than other major US brands. Forty-three percent of Target (NYSE:TGT) workers gave their employer a positive outlook, and a solid majority of Home Depot (NYSE:HD) and Whole Foods (NASDAQ:WFM) workers (61% and 62%, respectively) said their companies were on the upswing

Read more: http://www.minyanville.com/sectors/consumer/articles/Bad-News-For-Walmart2527s-Future253F-Walmart/5/20/2013/id/49916#ixzz2Tw1l7HwU

Why Wal-Mart Workers Are So Pessimistic
On Glassdoor.com, Wal-Mart employees repeat the same complaints: poor communication from upper management, low pay, no merit-based raises, and favoritism that pummels morale. Many lower-level workers strike the same note as this sales associate from Dillon, SC: "Not a job to make a career out of." They also frequently cite staff shortages, an issue that Bloomberg News reported on earlier this year. Customers wrote in complaining about poorly stocked shelves and missing inventory. Some said that they were driving farther to avoid their local Wal-Mart.

Wal-Mart, the Brand Under Siege

In the past year, Wal-Mart's image has been tarnished by worker protests, bribery allegations and speculation over the conditions at its foreign-suppliers' factories. According to brand-consulting firm BAV Consulting, Wal-Mart's brand perception among college-educated adults plummeted 50% between 2011 and 2012, reported the Wall Street Journal. To address some of these kinks in its image, Wal-Mart launched a new multimillion-dollar advertising campaign last month titled "The Real Wal-Mart," emphasizing its commitment to veterans, job creation and charitable work. Labor organizers didn't skip a beat, publishing their own website soon after with a less favorable portrayal of the mega-chain. It's title: "... Really Wal-Mart?"


Read more: http://www.minyanville.com/sectors/consumer/articles/Bad-News-For-Walmart2527s-Future253F-Walmart/5/20/2013/id/49916#ixzz2Tw1spxYB

Wal-Mart Again On Top Of Furtune 500

Adapted from Associated Press from CBC.com

Wal-Mart Stores Inc. once again leads Fortune's list of the 500 biggest U.S. companies by revenue, as the world's largest retailer succeeded in posting strong growth despite a challenging economy for its shoppers.

The Bentonville, Ark., company's revenue grew nearly 6 per cent in 2012 to $469.2 billion.
Exxon Mobil Corp. dropped to the second spot, with revenue of $449.9 billion, but was still the most profitable. Energy companies continued to dominate the top of the list, with rival oil and gas producer Chevron Corp. holding steady at No. 3 and refiners Valero Energy Corp. and Phillips 66, spun off from ConocoPhillips last year, joining the top 10.

The Top Ten

Company:	Revenue (in billions of $US):
1. Wal-Mart Stores	$469.2
2. Exxon Mobil	$449.9
3. Chevron	$233.9
4. Phillips 66	$169.6
5. Berkshire Hathaway	$162.5
6. Apple	$156.5
7. General Motors	$152.3
8. General Electric	$146.9
9. Valero Energy	$138.3
10. Ford Motor Company	$134.3

Moving up two spots to No. 5 is Warren Buffett's Berkshire Hathaway Inc., which owns everything from insurers to railroads to newspaper publishers and is in the process of acquiring Heinz Co. Manufacturing stalwarts General Motors Co., Ford Motor Co. and General Electric Co. slipped in the survey but all remained in the top 10.

Apple cracks the top 10

Bigger sales of iPads and iPhones helped Apple Inc. jump 11 spots to crack the top 10 for the first time, landing at No. 6. The Cupertino, Calif., company's soaring stock price also made it one of the most valuable companies by market cap last year, though shares have since posted a double-digit decline.

Another technology bellwether wasn't as fortunate. Hewlett-Packard Co. slipped to No. 15 from No. 10 as the Palo Alto, Calif., technology pioneer struggled with a broad consumer shift from PCs to smartphones and tablets and its own accounting missteps.

Also off the top 10 is government mortgage provider Fannie Mae, which dropped four spots to No. 12.

Meanwhile, social media powerhouse Facebook Inc., which last year went public in one of the biggest initial public offerings ever, debuted at 482 on the Fortune 500.

Wal-Mart wants you to think of it as a technology company

 

 

 

 

 

 

 

 

By Andria Cheng adopted from Marketwatch.com

Neil Ashe, president and  CEO of Wal-Mart Stores Inc.’s /quotes/zigman/245476/quotes/nls/wmtWMT+0.08% global eCommerce business, likes it when he heard description of Wal-Mart as a technology company.

He may have a good reason to do so.

Wal-Mart’s seeking to gain ground against its larger Web rival Amazon.com Inc. /quotes/zigman/63011/quotes/nls/amznAMZN+0.71%. It’s also figuring out how to increase its share of the market with more consumers toting mobile devices and comparison shopping online.

The company is also hoping its global database of customer information will give it a better read on consumers. In the past 18 months, Wal-Mart has built or expanded three technology centers in San Bruno, California; Bangalore and Sao Paulo. In the San Bruno and San Francisco Bay area, a 1,500-people global online commerce unit has been installed, separate from the corporate home base in Bentonville.

“Ecom is the next growth engine for Wal-Mart,” Ashe said at a Barclays Capital conference on Wednesday. “We have global leverage, not just in cost and capital investment, but innovation leverage.”

For example, Wal-Mart’s been testing same-day grocery delivery service in the Bay area with some know-how from its sister chain Asda in the U.K., which already delivers groceries across most of the U.K. and the No. 2 online grocer in that country, spokesman Dan Toporek told MarketWatch.
Wal-Mart, however, has a lot of catching up to do on the online front. The company, which analysts estimate will reach $490 billion in sales this year, in October projected its online sales would only reach $9 billion this year. In comparison, Wall Street estimated Amazon would rack up almost $75 billion in sales. Other retailers such as Williams-Sonoma /quotes/zigman/246567/quotes/nls/wsmWSM+0.91% generated a significantly higher percentage of their sales online.

Among some of its initiatives, Wal-Mart’s tech team will now constantly update its home page and search functions to make it easier and more interesting to shop. Over the next two days, for instance, Walmart.com in the U.S. is rolling out a new home page design that includes features that shows what’s trending on its site, including on a local store level.

While Wal-Mart is behind on the initiative compared to its retail counterparts such as Home Depot Inc. /quotes/zigman/229488/quotes/nls/hdHD+0.57%, the company this year also began to give credit to stores for online sales generated in their local area to encourage employees to help customers in stores find things online.
The company’s team also developed a tool last year that will allow it to compare its prices online on a real time basis against its rivals and adjust instantly, compared to in the past when it wasn’t as frequent or had to be done manually, Toporek said.

– Andria Cheng
– Follow her on twitter @AndriaCheng

Wal-Mart's Small Format Stores Pose New Problems for Vendors

From The City Wire

As Wal-Mart Stores continues to focus on a smaller footprint for some of its stores, suppliers will see less shelf space and analysts say there is no time to waste in planning a survival strategy.

The Bentonville-based retail giant recently announced it would build 125 new supercenters this year at a cost of $2 billion. Total square footage on the new supercenter prototype is 140,000, shrinking from 169,000 in 2010. That’s 17% smaller than supercenters built four years ago.

There are still plenty of 180,000 and even 200,000 square feet supercenters which were popular about 10 years ago. And though Wal-Mart had been updating and remodeling hundreds of stores across the country with a fresher look, over the past couple of years those remodels have become less flashy.

Wal-Mart Chief Financial Officer Charles Holley said in February that Wal-Mart had lowered the average cost of a remodel by 50% over the past two years and shifted more capital to new stores.Dishwashing detergent repackaging from liquid to pods requires less shelf space and is a more sustainable option. Consumers are also paying more for less product with the new design.
“The new supercenters will also look more bare boned, opting for concrete floors instead of wood laminate with plainer finishing both inside and out,” said Leon Nicholas, director of retail insight for Kantar Retail.

Nicholas said Wal-Mart has been more cognizant of the store space in recent years and suppliers need to be ready for package redesigns and other creative display options in the coming year or so.

Dr. Jim Tompkins, CEO of Tompkins International, said shrinking shelf space is in direct conflict with an explosion of new and varied products – branded and private label. He urges suppliers to consider direct marketing to consumers through a virtual store to help compensate for shrinking shelf space among the major big box retailers.

Tompkins, a supply chain expert, said suppliers and manufacturers will miss an important crossroad if they don’t begin readying themselves for direct-to-consumer possibilities in the omni-channel world.
Nicholas said as Wal-Mart continues to put more supercenters in its already core markets, there will be increased cannibalization of sales – another concern for suppliers.
He said some suppliers may not get in as many stores with a renewed emphasis on the localized sourcing that harkens back to Wal-Mart’s “store of the community” initiative.

 

Lastly, he expects there will be more competition between brands and private label. This is based on a ramp up of private label hirings in the past six months at Wal-Mart. Last summer, Wal-Mart posted nine jobs for private brand, the largest hiring since the Great Value re-launch, according to Robin Sherk, senior analyst with Kantar Retail. She predicts ongoing private label refinements and expansions this year and next.

Nicholas said the shrinking store space, and other dynamics at work in essence means suppliers may need to revamp packaging and look for other ways to attract “favorite” status with Wal-Mart.

 

One idea tossed about by the Kantar analysts is looking for shared services or other partnership initiatives that fit into the five key pillars Wal-Mart has erected:

• Hiring veterans
• On-shore sourcing;
• Empowering women,
• Reducing overall carbon footprint, and,
• Providing healthier food options at affordable prices.

 

Nicholas said suppliers should anticipate increased complexity to serve Wal-Mart in the near term as the retailer seeks to cut its own costs, thereby shifting more of the burden toward product suppliers

Wal-Mart is taking a good hard look at working conditions abroad

From Huffington Post

After the catastrophic collapse of the Rana Plaza garment factory building in Savar, Bangladesh, last week, Walmart is making assurances that it's taking the labor situation in the country seriously.
"Walmart has been advocating for improved worker safety with the Bangladeshi government, with industry groups and with suppliers," Walmart spokesman Kevin Gardner told The Huffington Post on Thursday. "We know that continued engagement is critical to ensure that reliable, proactive measures are in place and we are continuing to work with the industry association, suppliers, brands and other interested parties to come to an appropriate resolution on this matter and develop broad-based solutions for the industry."

Earlier reports linked Walmart suppliers to the collapsed factory, but Walmart confirmed to The Huffington Post that it had "no authorized production" at the Rana Plaza facility, where rescue workers still sifting through the rubble, and the death toll has risen to 430, with many still missing.
The garment industry in Bangladesh accounts for a whopping 77 percent of the country's exports and $20 billion per year. Walmart assured Retail Week that it considers the country an "important sourcing market."

The company also met with about 30 other retailers, including Gap and H&M, in Germany earlier this week to talk about infrastructure improvements in Bangladesh, and agreed to form a panel to address safety issues in the country.

But some workers rights advocates are demanding more significant advances from Walmart, one of the few retailers that they say has the power to facilitate real change in Bangladesh and the rest of the apparel-sourcing world.

"Walmart is the king of discount retail," said Scott Nova, executive director of the Worker Rights Consortium, an independent labor group. "They also enjoy royal status when it comes to empty promises about the rights and safety of workers in their supplier chain."

Nova said Walmart should agree to pay for fire safety inspections and renovations and repairs to their suppliers' factory buildings.

Walmart's sourcing practices came under heavy scrutiny after a report in The New York Times last December revealed that at a 2011 meeting in Bangladesh, the company played the "lead role" in blocking a push for increased electrical and fire safety.

That report followed a November fire at a different Bangladeshi supplier, Tazreen Fashion factory, that took the lives of more than 110 workers. Walmart goods were found in the aftermath of the fire, but the company claimed it hadn't authorized their production there.

In January, Walmart sent a 10-page letter to its suppliers announcing a "zero tolerance" policy, and proclaimed that starting March 1, the company would “terminate its relationship with any supplier engaging in unauthorized subcontracting.” Previously, Walmart had a three-strike system in place.
And last month, Walmart announced a $1.6 million donation to establish the Environment, Health and Safety (EHS) Academy in Bangladesh, which intends to provide apparel manufacturers access to "comprehensive training" on workplace safety, according to the company.

But Judy Gearhart, executive director of the International Labor Rights Forum, said Walmart can do more to help the victims at Tazreen and to respond to the factory collapse in Savar.
"We need brands to move beyond confidential and voluntary," she told HuffPost. "Walmart reported that their product was in Tazreen, but they are not contributing so far to the compensation fund because they didn’t approve the factory."

What's Up Doc? Wal-Mart and Warner Brothers Strike Up Rare Relationship

NEW YORK (AP) - Wal-Mart Stores Inc. has teamed up with Warner Bros. to give its customers first dibs at seeing the movie studio's "Man of Steel" in certain theaters across the country - before the official release.

Tickets for the movie, which stars Henry Cavill in the role of Clark Kent and Superman, will go on sale in more than 3,700 of the 4,000-plus Walmart stores starting at 8 a.m. May 18. Customers will be able to buy up to four tickets per visit and have the option to choose between 2D or 3D showings. The advance screening will take place in selected local theaters nationwide at 7 p.m. June 13, the day before the official release.

Both Wal-Mart and Warner Bros. say that this is the first time that a studio has teamed up with a retailer to offer this type of incentive.

About 1 million tickets for "Man of Steel" will be available at Wal-Mart stores. Nearly 2,400 theaters are participating in the advance screening for customers who purchase the tickets at the discounter.

Warner Bros. and the theaters, both of which will be getting the proceeds from the ticket sales, are hoping to capitalize on the millions of customers who shop at Wal-Mart each week. The world's largest retailer, based in Bentonville, Ark., is counting on the promotion to get shoppers into its stores and while there, pick up some of the "Man of Steel" themed merchandise like toys.

Chris Nagelson, vice president of entertainment merchandising at Walmart's U.S. stores, says that the discounter is trying to find "new and innovative ways" to team up with studios.

Dan Fellman, president of domestic distribution at Warner Bros. Pictures, noted the partnership could be the start of something new.

Wal-Mart has long been embracing various partnerships with movie studios.

Last year, Wal-Mart worked closely with Sony Pictures, Home Entertainment and Marvel Entertainment in promoting "The Amazing Spider-Man Unmasked." As part of the program, Wal-Mart had trucks outside of about 1,000 of its stores featuring merchandise and displaying a demo of the film.

Copyright 2013 The Associated Press. All rights reserved.

Sam's Club is again the Top Retailer in Positive Customer Experience

Taken from Businessweek.com, written by Bruce Temkin

We recently released the 2013 Temkin Experience Ratings that ranks the customer experience of 246 companies across 19 industries based on a survey of 10,000 U.S. consumers. Here are highlights from the retail industry:

• The average industry rating increased from 71% in 2012 to 74% in 2013.
• Sixteen of the 24 retailers that were in both the 2012 and 2013 ratings showed improvement.
• Three of the top 10 companies across all industries are retailers: Amazon.com and Sam’s Club (tied for #5 overall), and Ace Hardware (#7 overall). Sam’s Club was the leader in 2012 Temkin Experience Ratings and Amazon.com led in 2011.
• Radio Shack is the lowest-rated retailer for the third consecutive year and 191^st overall in 2013. The retailer is also the lowest scoring across all three underlying components, functional, accessible, and emotional.
• Amazon.com and Costco are the top rated in the functional component, Ace Hardware is the top rated in the accessible component, and Nordstrom is the top in the emotional component.
• Office Depot (increase of 11 percentage points) and Barnes & Noble (increase of eight percentage points) made the largest improvements in the industry from 2012.
• JCPenney (decrease of six percentage points), Sam’s Club (decrease of four percentage points), and Lowe’s (decrease of four percentage points) had the largest declines from 2012.
• Here’s a link to industry results from the 2012 ratings.

About Bruce Temkin
Bruce is  a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, he examines strategy, marketing, interaction design, customer service, and leadership practices. His “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Their goal is simple: accelerate the path to delighting customers.

The Profits and Perils of Bring a Wal-Mart Vendor

When Taunya Painter worked as a senior corporate counsel for Wal-Mart ( (WMT)), she noticed that many of the small suppliers that wanted contracts with the known for pressuring suppliers to cut prices, hadn't done all their homework. Few fully understood what they would be signing and few took advantage of Wal-Mart's supplier development team, a free resource designed to help less-experienced suppliers forge enduring relationships with managers and buyers. (Other large retailers, including Home Depot ( (HD)), Best Buy ( (BBY)), and have in-house teams meant to serve similar purposes.) Painter, who worked for the mega-retailer from 2002 to 2007, says more of the entrepreneurs she dealt with might have managed to secure and renew contracts if they had familiarized themselves with these two pieces of the supplier-retailer puzzle. While there are more pieces to the puzzle, by taking the time at first to understand what the contract entails, a potential supplier can determine whether or not it even makes sense to try to become one of Wal-Mart's 57,000 U.S. suppliers. The contract, commonly known as the vendor agreement, outlines the mechanics of how the supplier and retailer will work together. The agreement generally addresses sales and delivery timeframe, arbitration, and termination rights, and liability. As a rule, Wal-Mart uses a non-negotiable boilerplate. Charley Moore, CEO and founder of legal service .com, says this means potential suppliers can study similar contracts online before meeting with the buyer. Wal-Mart generally starts out smaller suppliers in a local market, delivering goods to up to 50 stores, as a test run. If the supplier provides a high-selling product and proves reliable, it might be considered for national distribution. Bruce Zutler, CEO and co-founder of MCI Products Group, a New York-based company that specializes in new product development and overseas sourcing, recommends small suppliers think of the test-run as the time to prove they are capable. "If you have a good product and you strengthen their sales, then the buyer will stay with you," says Zutler.Broad Customer Base a Must But suppliers should know that Wal-Mart will only work with suppliers that can prove three-quarters of their business comes from entities other than Wal-Mart, per Wal-Mart policy. After proving that, the key to impressing a buyer is to show understanding of the potential market, says Theresa Barrera, vice-president of supplier diversity for Wal-Mart. "What sets some of these smaller suppliers apart is being innovative and knowing what sells in their regions." It is also up to suppliers to understand the impact of national trends on Wal-Mart and be prepared to adapt, says Excell La Fayette, director of supplier development. He, too, urges suppliers to do their research before they call. "A lot of people think Wal-Mart is kind of a free-for-all; that if they come in we'll buy anything." cooks, packages, and ships the meat for Wal-Mart's Great Value brand breakfast sausage to more than 50 stores in different regions across the country. Michael Thompson, president and CEO of the Pleasant Prairie(Wis.)-based company, says the key to landing a deal and getting the contract renewed over the companies' ongoing five-year relationship was conveying an understanding of growth opportunities and explaining what his 300-person company could do to meet Wal-Mart's needs. Beyond that, he says it is important for hopeful suppliers to remain persistent, be patient, and bring their "A-game" to the meeting with the buyer.Liable for Chargebacks Of course, even if a supplier does manage to convince Wal-Mart to sign a supplier agreement, it almost never obligates the retailer to buy anything. "I tell people not to pop the cork when the contract is signed, but pop it when the purchase order comes in," says Painter, who now runs her own law firm in Texas, specializing in domestic and international business litigation. Wal-Mart says its payment cycles vary by category, but that most suppliers are paid within 30 to 45 days. And suppliers looking to sign should also know that even if everything is done right, the state of the economy could derail chances that the relationship is profitable, at least in the short term. Nina Kaufman, a business attorney in New York who posts frequently on her blog, AskTheBusinessLawyer.com, says suppliers should be aware of how large retailers like Wal-Mart manage low sales that result in surplus inventory. Those designated "guaranteed suppliers" guarantee that their product will sell. If they don't, a provision in the contract makes them liable for chargebacks. Ultimately, understanding all aspects of the is key to landing—and renewing—a deal with Wal-Mart. Painter says getting an experienced supplier to serve as a mentor can also be invaluable. "I always suggest tapping into resources the retailer has other than the buyer," says Painter "It's important to know who are your allies in the organization."

How Wal-Mart Can Offer Made In USA At Such Low Prices.

FREDERIC J. BROWN / AFP / Getty Images

Police man the front of a Walmart store amid heightened Black Friday security in Paramount, Calif., on Nov. 23, 2012

From Time Magazine

 

Walmart doesn’t make anything. But the giant retailer could play a part in the manufacturing rebound that is taking place in the U.S. with its promise to buy $50 billion more U.S. made goods over the next decade for its Walmart and Sam’s Club stores. It’s a bit ironic, given Walmart’s vast global sourcing organization. But the same forces that are making the U.S. a more hospitable place for manufacturing —higher shipping costs and wage rates overseas among them—have prompted the company to reevaluate its sourcing on a variety of products. “This is a commitment around manufacturing and more economic renewal. We see it as a critical issue for us in the American economy,” says Duncan Mac Naughton chief merchandising and marketing officer for Walmart U.S.

 

What Walmart sees is a way to lower costs while smoothing its supply cycle by looking more broadly at its distribution system. Although the company may be able to buy an item cheaper from China, the price it pays per piece doesn’t always reflect what it spends to get the product to the shelves. “When we buy from overseas, we may buy more than we need to fill the container,” says Mac Naughton. “We’re looking at carrying costs through the system in addition to landed costs.” (Walmart has recently been criticized for being out of stock on items, due to a lack of store employees, but the company says its in-stock position is at record levels and that it hasn’t cut employee hours.)

Walmart is also hitting some unexpected supply snags as local demand increases in the developing countries where it buys goods. Recently, it found itself short of memory foam for mattress toppers and had to add a U.S. supplier, Sleep Studio, to augment its foreign source. That need to increase capacity can only increase as the middle class grows in India, China and elsewhere. The company will still likely rely on foreign suppliers for those products, such as cut-and-sew garments, that have a very high labor input. But given the more robust regulatory environment in the U.S., domestic suppliers are far less likely to run shoddy plants that endanger workers, as some of Walmart’s overseas subcontracters have been accused of doing.

Which suppliers stand to benefit from Walmart’s strategy? The company says that products with a “high cube” (supply-chain speak for big and/or bulky, such as furniture) are candidates. So are products that have more highly-automated production, meaning lower direct labor, or products that have a less predictable sales curves and might have to be produced quickly to meet a sharp rise in demand. The company says items such as sporting goods, storage products, games and paper products are likely categories.

One of the first companies to benefit is 1888 Mills in Griffin, Georgia, which makes better-quality towels. Walmart’s version will be labeled “Made Here.” 1888 Mills had some spare manufacturing capacity, but since the size of Walmart’s orders can distort any vendor’s production, 1888 Mills needed a longer-term deal to be able to make the investment required to produce the needed quantities. “We made a commitment that was longer term than we would normally do. There’s transparency on the part of both parties: we worked with collaboratively with them,” says Michelle Gloeckler, Walmart’s senior vice president of home.

Camping and outdoor goods company Coleman is another participant. The firm, owned by Jarden Corp. is manufacturing its hard-sided coolers and personal flotation devices in the U.S., adding 160 jobs according to Walmart. Jarden, whose brands range from Quickie mops to K2 skis, has been ahead of Walmart on domestic manufacturing. Jarden has been on a reshoring kick for about two years.

Some of Walmart’s vendors will get a chuckle out of the idea that Walmart is willing to become more transparent. Walmart has a reputation for getting vendors into its buying rooms and beating the hell out of them on price, essentially leaving them with little margin. But Mac Naughton says that Walmart has to start thinking longer term, rather than season-to-season and that this kind of collaboration will reduce costs for both parties over time, paving the way for lower prices for consumers. For instance, a U.S. manufacturer can bypass Walmart’s distribution centers and deliver directly to stores, so-called “no touch” distribution.

Although $50 billion is a lot of goods, it’s about 10% of what Walmart will sell this year at retail. The company says the $50 billion is just a starting point, and that if other retailers joined the party the figure could be much, much higher, perhaps $500 billion. Walmart’s U.S. president, Bill Simon, suggested in a speech to fellow retailers that the power of their order books can help reshore U.S. production in textiles, furniture, pet supplies, some outdoor categories, and higher end appliances.
This isn’t Walmart’s first crack at a Made in America program. An earlier one fizzled, amid some bad publicity, because Walmart couldn’t get enough low-priced merchandise to sell. Americans may love their country, but they will buy Chinese if the price differential is too high. This time Walmart says consumers won’t have to pay up to buy domestic. “I hope the American consumer values this and we’ll make it easy for them,” says Mac Naughton. If not, consumers won’t make it easy for Walmart.

Read more: http://business.time.com/2013/04/12/how-walmart-plans-to-bring-back-made-in-america/#ixzz2QdYh03Ku

Wal-Mart Tightens Its Off-Shore Manufacturing Policies After Bangledesh Inferno.

By Jessica Wohl

April 9 (Reuters) - Wal-Mart Stores Inc, the world's largest retailer, is making its biggest push yet to try to improve conditions at factories that produce its clothing after a fire at a Bangladesh factory killed 112 people last year.

The company also said Tuesday it would donate $1.6 million to help start a new Bangladesh training academy, and outlined its efforts to regain control over the complex and far-flung web of factories that make its products.

"With the focus that is there at the moment on fire safety, everyone is keen to make sure that they get the right level of controls in place to protect the workers," Rajan Kamalanathan, Wal-Mart's vice president of ethical sourcing, said in an interview. "There is a need for that."

Wal-Mart says it was unaware that its private label clothing was being made in the Tazreen Fashions factory that went up in flames in November, killing 112 people and injuring at least 150. Bangladeshi authorities said the facility was not safe for use, and Wal-Mart said it had not authorized anyone to make its garments there.

The fire gave rise to criticism that Wal-Mart should have been more aware of its supply chain. Since the fire, Wal-Mart has been taking a harder look at what it can do to monitor safety at the low-cost factories that produce its goods.

While products for other companies, such as Sears Holdings Corp and Walt Disney Co, were also being made at Tazreen, the biggest spotlight has been on Wal-Mart to push for safety improvements.

Wal-Mart sent a 10-page letter to suppliers in January to lay out its policies. Since then, it has held meetings with them in Bentonville, Arkansas, where it is based; in Bangkok; and elsewhere.

The company has given its suppliers until April 15 to disclose which factories they work with, and says it will sever ties with those that subcontract work without telling Wal-Mart.

Along with the donation to the Institute for Sustainable Communities (ISC), Wal-Mart last month started to have Bureau Veritas, a European testing and inspection company, assess factories and train workers on its behalf in Bangladesh.

ISC plans to set up an Environmental, Health and Safety Academy in Bangladesh with the $1.6 million in funding from Wal-Mart and $2 million from Sida, the Swedish International Development Agency.

Wal-Mart's New Advertising Campaign Focuses on Low Prices With a Local Theme.

From Adage.com Written by Jack Neff

Once it became a true national retail presence in the late 1990s, Walmart had a big advantage over regional competitors: It could buy national TV, and they couldn't.

Now Walmart is giving up some of that edge as it plows a growing portion of its TV budget into spot, rolling out price-comparison ads against local retailers in 60 markets this year, up from 50 last year. It's part of a plan that will see Walmart produce an eye-popping 1,500 TV ads in 2013. That's more than double the 615-plus it ran in all of 2012, which itself was up substantially from a year earlier, when new local ads up 79%, according to Advertising Benchmark Index, which tracks consumer response to most new ads in the U.S.

It's all part of Walmart's effort to apply the real-time marketing popular in social media to TV, said people familiar with the campaign, though that does come at considerable cost in terms of production and spot media buys.

"We're still running a number of national ads and still feel that's playing an important role," a Walmart representative said. "But we also know grocery is a local business, and it's important to have that local voice out there."

The price comparisons already have raised hackles of competitors, who started complaining to state attorneys general last year but have so far not prompted any formal investigations, another Walmart spokesman said.

And it comes as independent analyses reach varying conclusions on how much better Walmart's prices really are vs. the competition. A study on 70 items in January and February by Consumer Edge Research found Walmart beat Kroger and Safeway most of the time on prices, though Kroger beat Walmart on beverages and Safeway tied Walmart on dairy.

While Safeway's prices were 19% higher than Walmart's overall, Dollar General actually beat Walmart in the study, while Family Dollar, Kroger and Target were all within 2% to 3% of Walmart's prices. Target beat Walmart for people using its RedCard and getting 5% savings.
A Kantar Retail survey found Walmart prices to be on average 4% lower than Target's in January, with edible grocery 14% lower than Target nationally. That was Walmart's best performance on those metrics since the survey began in 2009 -- though RedCard users still would have spent slightly less on the items than at Walmart.

The thrust of Walmart's local TV ads is comparing the cash-register receipts of consumers who shopped at a competitor to what they would have paid at Walmart (rather than looking at some artificially concocted market basket). And according to Advertising Benchmark Index consumer panels, the ads work. Walmart's local price-comparison ads average around 130 on the index, which factors in such things as likability and purchase intent, or around 30% above average for industry ads.
The sheer logistics of producing so many ads is daunting, though. Walmart is using a combination of in-house resources and outside agencies to shoulder the burden, the spokeswoman said. Walmart's primary creative agency, the Martin Agency, Richmond, Va., is doing some of the work, she said, but other agencies she declined to specify are pitching in. Andy Johnson, Walmart's senior director-advertising and production, plans to talk about how Walmart does "better, faster, cheaper production" at the Association of National Advertisers Financial Management Conference in Scottsdale, Ariz., next month.

The price-focused ads probably help with some Walmart shoppers, but surprisingly not much with the most price-focused ones, said Consumer Edge analyst Stacie Rabinowitz. Her company's monthly tracking survey of more than 2,000 U.S. consumers found Walmart's most price-sensitive shoppers, who also tend to be lower income, are the most likely to shop around at dollar stores and a variety of other retailers as they cherry-pick the best deals at each

Is Wal-Mart Alienating Their Upper Class Shoppers?

From YAHOO! News.

NEW YORK (AP) -- One analyst says that some of Wal-Mart's higher-income customers aren't as happy as they used to be.
                

Cowen's Faye Landes cited the firm's own survey in a client note Thursday. She said it showed that from December to March, higher- and middle-income shoppers became slightly less satisfied with customer services, prices and product selection.

                
Landes believes this may be due in part to there being fewer employees at each U.S. store. The analyst said that the number of workers per U.S. store went from 325 in 2010's fourth quarter to 289 in 2013's fourth quarter.
                
"Reduced store labor, despite the company's best efforts, likely results in some diminishment of customer service, which consumers may notice over time," she said.
                
Landes terms higher-income shoppers as those from households that make more than $100,000 per year. She says that three-quarters of those consumers shop at Wal-Mart at least once per month.
The average household incomes for Wal-Mart customers range from $30,000 to $60,000.
Fewer higher-income shoppers at Wal-Mart could hurt the chain's U.S. sales. The company is already dealing with the hit of higher payroll taxes and rising gas taxes on the poor and middle-class Americans who are its core customers. In late February, it forecast profit for this year that fell below expectations of Wall Street analysts at the time.
                
"We survey 500,000 customers per month who continue to tell us they have had a positive shopping experience. These customer satisfaction numbers have trended upward over the past two years. In this economy, we are continuing to see higher-income customers trade in to Walmart to take advantage of our everyday low prices," said spokeswoman Brooke Buchanan in an emailed statement.
Wal-Mart stock added 34 cents to $76.34 in afternoon trading.

From Time Magazine - Written by Christofer Matthews

Last Monday, Dollar General, the U.S.’s largest dollar-store chain, posted better-than-expected profits, helping boost the company’s stock, which is up 15% year to date. And earlier this year, it announced plans to open its 11,000th store by the end of the 2013 — an impressive figure for a discount retailer. The only other companies to boast store counts that high are fast-food chains like McDonald’s and Subway.

And Dollar General isn’t the only dollar chain to have had success in recent years. Competitors Dollar Tree and Family Dollar have also experienced significant growth in revenue since the 2008 recession, when many consumers began shopping at discount chains for everyday items like cleaning supplies, toiletries and groceries. Another boon to these sorts of discount chains has been government safety-net programs like food stamps, which prevented those already shopping at dollar stores from being shut out altogether from being able to afford necessities. According to Morningstar analyst Michael Keara, 40% of dollar-store-sector customers rely on some form of government assistance.


Meanwhile, Walmart — America’s biggest and most successful discount retailer — has not been performing as well since the recession, and is off to a slow start in 2013. So why have dollar stores been able to capitalize on the weak economy while Walmart hasn’t? There are a few reasons:

1. Walmart was already starting from a position of dominance. When you’re the biggest retailer in the U.S., it’s much more difficult to achieve steady sales growth than if you’re an outfit like Dollar General, which was losing money as recently as 2007.
2. Dollar stores had the inside track in the race for urban shoppers. Walmart’s bread and butter are rural and ex-urban shoppers who can access its massive supercenters with relative ease. Penetrating the urban market has proved more difficult for the simple reason that the supercenter model cannot easily be reproduced in places with less space. Walmart is trying to remedy this with its push to open more smaller “neighborhood centers,” but it has some catching up to do in order to reach the sort of urban penetration that dollar stores have.
3. Dollar stores are getting away with higher prices. Though dollar stores are known to sell off-brand items at low prices, overall dollar stores are selling their merchandise at higher margins than Walmart. That means that either dollar stores are buying their goods for less than Walmart, or that dollar stores are getting away with higher prices on a pound-for-pound basis. And given Walmart’s legendary purchasing power and supply-chain management, it’s highly unlikely that any of the major dollar-stores chains can consistently source their merchandise more cheaply. What’s more likely is that dollar stores have successfully masked their higher prices by selling items in smaller portions and by strategically discounting certain items.

With these factors in mind, it’s difficult to see dollar stores maintaining their current growth rates for much longer. Walmart recently announced a plan to ramp up its efforts to build smaller Neighborhood Market outlets, which will be on average about one-third the size of its traditional supercenters. These stores will be better positioned to attract customers in urban centers where Walmart has lagged the competition. The retail giant has also said it will be instituting $6 billion in price cuts over the next several years, which will make it more difficult for dollar chains to maintain their market share and high margins at the same time.

Walmart has also made several unforced errors in the past couple of years, from limiting its product selection to allegedly understaffing many of its supercenters. But it’s hard to imagine that a company with Walmart’s track record will continue to flounder for very long. Dollar stores have exposed and capitalized on some chinks in Walmart’s armor over the past few years, but the world’s biggest retailer has begun to address those weaknesses, and will no longer be taking the fight lying down.

Read more: http://business.time.com/2013/04/01/will-dollar-stores-rule-the-retail-world/#ixzz2PyPK9FBS

Wal-Mart's New Business Model Set For Expansion

By Sheldon Cwinn

In the what to expect next category, the following is Wal-Mart's new strategy for rapid expansion.

College students will soon have a different late night joint from which to buy cheap pizza and soft drinks. Only now they’ll be able to purchase school supplies and their basic household needs in the same place they get their pizza, as Wal-Mart (NYSE:WMT) announced it will be opening two more college campus locations.

In 2011, Wal-Mart opened its first college campus location at the University of Arkansas at Fayetteville, reports Inside Higher Ed. A 5,000 square feet facility is scheduled to open at Arizona State University in May, with a location on Georgia Tech’s campus scheduled to open sometime next year

A Wal-Mart spokeswoman, Delia Garcia, said that the university stores would be “tailored to the on-campus customer, providing general merchandise, convenience items [and] pharmacy services.” Garcia was also adamant about the fact that the company is still testing this business model, and that no new locations are scheduled beyond Georgia Tech.

One item that Wal-Mart will refrain from providing is school textbooks. Charles Schmidt of the National Association of College Stores believes college bookstores need not be afraid of the company.

“Students already are going to big-box discounters, but at least if they’re in the same vicinity as your store, they are more liable to come in and give you the chance to ‘show them what you’ve got,’” Schmidt said. “Kind of a ‘mall’ effect”…

So far Wal-Mart's "experiment" has been met with great success.

Wal-Mart Likely to Incur Losses Due To Bribery Scandal

From dailyfinance.com

NEW YORK -- Wal-Mart Stores Inc. (WMT) said it is 'probable' that the world's largest retailer will incur a loss due to ongoing bribery investigations by itself and government agencies, but it says it is too early to speculate on the size of the damage.

The company said it does not currently expect the loss to be material. The statements came in a filing with the Securities and Exchange Commission filing late Tuesday.

Wal-Mart Stores has been dealing with allegations that surfaced last April that it failed to notify law enforcement that company officials authorized millions of dollars in payments in Mexico to speed up getting building permits and gain other favors. The Foreign Corrupt Practices Act forbids American companies from bribing foreign officials.

The company has launched its own investigation and is working with government officials in the U.S. and Mexico. In November, the retailer said in a filing with the Securities and Exchange Commission that it was looking into potential U.S. bribery law violations in Brazil, China and India.

In another filing Tuesday with the SEC, Wal-Mart Stores said that it expects to incur costs above the $157 million it spent on the probes in fiscal 2013 because of its ongoing review and other investigations as well as shareholder lawsuits.

It also said it is "probable" that it will incur a loss from the matters, but did not give an estimate on how much.

"Given the on-going nature and complexity of the review, inquiries and investigations, we cannot reasonably estimate any loss or range of loss that may arise from these matters," Bentonville, Ark.-based Wal-Mart said in the filing.

The company said it does not currently think the lawsuits will have a "material adverse effect" on its business but said it is possible that could change in the future.

"This is clearly a bad action, if found guilty, but we believe these issues and penalties will not dramatically impair their balance sheet and its ongoing business model," especially in the U.S., Janney Capital Markets analyst David Strasser said in a note to investors.

He cited other cases where companies have been penalized for violating the FCPA. The biggest was Siemens, which paid $800 million to U.S. authorities and $800 million to German authorities in 2008. Even if Wal-Mart paid that, Strasser said, it would still be able to absorb the costs without significant problems.

On the positive side, Strasser said the company has slowed growth and capital spending internationally, which should help its balance sheet.

He kept his "Buy" rating on the stock.

Wal-Mart Reaches Out To Small Businesses Run By Women.

(Reuters) - Wal-Mart Stores Inc (WMT.N) on Thursday will launch a line of products from small, women-owned businesses on its website, its latest push to position itself as a leader in women's economic empowerment.

More than 200 items, from jewelry and iPad cases to coffee beans and apparel, will be sold on the "Empowering Women Together" section of Walmart.com, the world's largest retailer said on Thursday, a day before International Women's Day.

The products currently come from nine countries including Cambodia, Haiti and the United States and include a $9.88 Women's Bean Project soup mix and cornbread mix gift set and a $20 dress from the Rwandan women's company Gahaya Links.

Wal-Mart continues to work on transforming its image from a corporation that critics say underpays workers and does harm with its large stores into an outspoken corporate citizen that hires more veterans, reduces its impact on the environment and works with local suppliers.

The women's items will be part of the "Store for Good," a project Walmart.com is working on for products that do good for others, for consumers or for the environment. Future goods may include eco-friendly items and healthier food, it said.

Walmart.com will highlight the new section of its site on its main page. For now, the goods will only be sold online, not in Walmart stores.

In September 2011, three months after the U.S. Supreme Court threw out women's massive class-action sex-discrimination lawsuit against Wal-Mart, the retailer laid out broad plans for women's economic empowerment.

Wal-Mart's goals include spending $20 billion over five years through 2016 with women's businesses that provide goods for the company's U.S. business, up from about $2.5 billion a year previously. It also aims to double sourcing from international suppliers run by women.

 

Wal-Mart's partners in the Empowering Women Together project include Full Circle Exchange and Global Goods Partners, non-profit organizations that sell products made by women.
(Reporting by Jessica Wohl in Chicago; Editing by Alden Bentley)

Is your merchandise sitting in the store's back room? Here is a simple method to tell.

 

By Sheldon Cwinn

 

How to make sure your inventory is getting to the shelf.

 

Selling to Wal-Mart is unlike selling to any other retailer because it is really selling on consignment. You receive an advance on your merchandise sitting in the stores, but that is all it is an "advance". If you analyze the situation closely, you come to realise that your actual customer is each individual store, and the most successful Wal-Mart vendors have relationships with their top stores.

 

Because your merchandise is at Wal-Mart on consignment, a key factor in succeeding is making sure that your merchandise is actually on store shelves.

 

The traditional way of "seeing" whether or not your inventory is on the shelf is to look at the "store on hand" on a Store Detail Sales Report produced by Retail Link. Another way to double check is to see what merchandise has shipped out of the Distribution Center(s) and to which stores it is shipped. But the question is .... is your merchandise really making it to the store shelf ?

 

A great way to find out if the merchandise is actually on the floor is to check for phantom inventory. To do this you average each store's sales for the last 6 - 8 weeks. Then you look for stores that have below a certain sales threshold last week (often times zero) depending on the nature of your product. Next look at the "on hand qty". If there is quantity on hand and suddenly the store is not producing sales chances are that store has phantom inventory.

 

Resolving the phatom inventory issue is easy. Simply present that store manager with the facts in a friendly phone call. It is in his interest to place the merchandise on the shelf where it belongs!