[Vision2020] Fwd: Walmart

[Ralph Nielsen]

Begin forwarded message:

> From: gw at guardian.co.uk
> Date: August 31, 2006 12:37:22 AM PDT
>
> Comment / Wal-Mart may be just too American for the world / Richard  
> Adams on how the company formula mirrors US foreign policy: brash,  
> bold and unpopular
>
>
> When Thomas Friedman - the US journalist who is globalisation's  
> loudest cheerleader - wanted to illustrate the powerful forces at  
> work in the world economy, he got on a flight for Bentonville,  
> Arkansas, headquarters of the glory that is Wal-Mart.
>
> In his hagiographic bestseller, The World is Flat, Friedman records  
> his awe while standing in the middle of Wal-Mart's operation centre  
> in Bentonville, watching the movement of goods to and fro at the  
> heart of the world's largest retailer - a company that last year  
> recorded more than $300bn in sales from 6,600 stores in  15  
> countries, including the Asda chain in Britain.

> "Call it 'the Wal-Mart Symphony' in multiple movements - with no  
> finale," Friedman wrote in his trademark breathless prose. "It just  
> plays over and over 24/7/365: delivery, sorting, packing  
> distribution, buying, manufacturing, reordering, delivery, sorting,  
> packing . . ."
> Friedman was so impressed that he named Wal-Mart as one of the  
> biggest forces driving globalisation, saying: "It's role as one of  
> the 10 forces that flattened the world is undeniable."

> As it happens, recent history has not been kind to Friedman. The  
> computer manufacturer Dell, lauded to the skies in The World is  
> Flat, found that its laptops included a built-in cigarette-lighter  
> feature, when their batteries began bursting into flames.

> Now it is Wal-Mart's turn to suffer the curse of Friedman. Since  
> his book was published, it seems that little has gone right for the  
> champion of globalisation with the motto "Always low prices".

> In recent months the giant retailer - at the start of this year the  
> world's second-largest corporation by revenue after oil baron Exxon  
> Mobil - has suffered a string of defeats. Some have been self- 
> inflicted, but others are a sign that Wal-Mart's attempts to export  
> its formula of enormous purchasing power and cheap imports from  
> China, combined with stringent cost-cutting and aggressive anti- 
> unionism, are beginning to fail.

>
> The first sign that Friedman's steamroller of globalisation was  
> stalling came in May, when the company announced that it was  
> pulling out of South Korea. This was one of the first countries Wal- 
> Mart moved into outside North America. But its all-American model  
> of piling very high and selling very cheap never appealed to  
> consumers there. "It failed to read what South Korean housewives  
> want when they go shopping," a local analyst told the New York Times.

> In July the company announced that it was also withdrawing from  
> Germany and selling its 85 stores there, despite pouring in  
> hundreds of millions of dollars over the years to compete with  
> local chains such as Aldi. German customers were turned off by the  
> enforced friendliness of its  employees, while the employees  
> objected to US imports such as chanting at morning staff meetings:  
> "Who's number one? The customer."

> In the UK, Wal-Mart has also run into trouble with its Asda  
> subsidiary. In July the threat of a strike by the GMB union led the  
> company to make unusually significant concessions. Not long  
> afterwards it was revealed by the All-China Federation of Trade  
> Unions that Wal-Mart had allowed 19 unions to be set up in its  
> stores there.

> The softening line comes as Wal-Mart's bottom line has suffered.  
> Last week the company announced its first decline in net profits  
> for 10 years, thanks to weak sales in the US and UK and the cost of  
> cutting its losses in Germany. The faltering sales in the US come  
> as shoppers, hit by higher petrol prices, appear less willing to  
> drive long distances to one of Wal-Mart's monster outlets.

> Despite its recent setbacks, Wal-Mart is not about to give up. Its   
> international expansion will continue - at the end of last year it  
> invested in Brazil, Japan and central America. And it remains  
> hugely powerful in the US, where polls show that of those who shop  
> at least once a week in the company's outlets, 78% voted for George  
> Bush in 2004.
>
> But outside America, Wal-Mart's formula may be mirroring US foreign  
> policy: brash, bold and unpopular. Unfortunately for Thomas  
> Friedman, the rest of the world may not want to be flattened.
>