Sprawled Out: The Search for Community in the American Suburb: Wal-Mart: They don't care if you hate them

Things you hate to see:

- A large oil spot in the driveway where your car was parked
- A big little "bomb" symbol in the middle of your computer screen
- Scattered clothing and a discarded shoe in the lion enclosure at the Milwaukee County Zoo
- A picture of the mayor of your city in a newspaper next to a headline that says "Welcome Wal-Mart"

But there it was, below the fold in the July 27th issue of the Milwaukee Business Journal: Franklin Mayor Tom Taylor giving the high sign to the retail monster for a Supercenter upgrade. With some improvements, of course. Pretty please.

"It would be nice if Wal-Mart upgraded that business in that area," [Mayor Taylor] said.

It would be nice. But it won't happen.

But, guess what? Wal-Mart doesn't care.

Not so long ago large companies toed the line to some extent in order to curry favor among the public at large. It was a standard tool in the public relations toolbelt: If people like you, they'll do business with you.

Wal-Mart now understands that they are not under that pressure.

The ad agency Foote, Cone & Belding traveled to Oklahoma City (selected because Wal- Mart has the latest of all its formats - - Wal-Mart, Supercenter, Sam's Club, and Neighborhood Market - - - operating there) to see who shops Wal-Mart and how they feel about the store. After compiling the data, the group split those surveyed into four segments - the champions, the enthusiasts, the conflicted and the rejecters.

From Heidi R. Centrella's story in The Oklahoma City Journal Record:

The champions really love Wal-Mart, she said, and they make up about 29 percent of shoppers, tending to be younger families. The enthusiasts are 27 percent of shoppers who are typically older and on fixed incomes, they also look at Wal-Mart as a trusted advocate looking out for them.

The conflicted are 15 percent of shoppers who tend to be boomer families.

The reason we call them 'conflicted' is because they're very Wal- Mart negative. And they don't like (Wal-Marts) for political and societal reasons. They feel that Wal-Marts are killing off mom-and- pop shops, losing jobs, et cetera, [senior vice president and director of brand equities at FCB Paula] Ausick said.

However, this group shopped at Wal-Mart 5.6 times in the past four weeks. They're the second-highest most frequent shopper of Wal-Mart.

Wal-Mart rejectors are 29 percent of shoppers. They tend to be dual-income, no-kid families. And they shop Wal-Mart about once every four months.

As Charles Fishman says in his excellent (and balanced) book, THE WAL-MART EFFECT: "How many companies can say that the amount of customers who use their services second most often, and spend the second most amount of money with them, are 'very negative.'?"

Bottom line: Wal-Mart knows it need not be liked in order to continue making money. That's why they have no qualms about:

building stores that are a blight inside and out

squeezing suppliers until they have to move manufacturing to China

squeezing municipalities by demanding tax breaks and free land
(only to then lease the free land to a Wendy's or Pay-Less Shoe Store
and pocket the income)

doing all they can to keep their employees on or below the poverty
line by enforcing low wages and insufficient benefits leading to
additional stress on state aid agencies, etc.

How bad is it? In Arkansas - Wal-Mart headquarters - Wal-Mart is NUMBER ONE in Children of employees on publicly-funded State Health Care programs.

Quoting a story in the Arkansas Democrat-Gazette: "Georgia, Tennessee, Washington, Massachusetts, Wisconsin, West Virginia and Connecticut have also reported that Wal-Mart employees, or their children are a disproportionately large share of their state health rolls."

More: "A 2002 Georgia state survey showed that 10,261 of the 166,000 children covered by PeachCare for Kids (a Georgia state health program) had a parent working at Wal-Mart. That’s 14 times the number for the next highest employer, Publix grocery store, with 734."

Now, is that just because Wal-Mart employs SO MANY people that the numbers are skewed? I'm afraid not: Wal-Mart claims to have similar health care coverage as other large retailers. That's just silly. A recent Harvard Business School study (2002) shows that Wal-Mart spent an average of $3,500 a year on health care for each employee, compared with $4,800 for the average retailer and $5,600 for the average U.S. company. In Tennessee these numbers are even worse, with 3,700 of Wal-Mart’s 9,617 employees, or 26%, on state aid (according to the Chattanooga Times Free Press)!

When you are the biggest employer in the country, these practices CAN and DO cost the taxpayer money, putting ENORMOUS pressure on state health care systems. Just "good business"? It's irresponsible and simply shameful.

And this is not to mention Wal-Mart suppliers. Decades-old companies that provided jobs for thousands of people in their communities are forced to close their domestic operations by Wal-Mart's demand that they CONSTANTLY lower their prices to meet Wal-Mart's internal goals. Now you can get that $75 air conditioner for $69 - - - meanwhile, 97 American workers at the air conditioner factory are out of work because the jobs had to be shipped overseas to meet the Wal-Mart price demand. (There's a pretty interesting story along those lines with very specific cases here.)

The products you think you're getting such a good deal on aren't so great anymore, either. THE WAL-MART EFFECT contains an instructive case history in the sad fate of the L.R. Nelson sprinkler company of Peoria, IL. Long story short: Got involved with Wal-Mart; forced to lower quality on products (plastic swapped for metal, etc.); then forced to move elements of production to China. Sturdy sprinklers are now a thing of the past, as whatever is speced by Wal-Mart also goes everywhere else (that's part of "the Wal-Mart effect"). Instead of spending $40 once every ten years on a good sprinkler, you spend $9.99 every summer on a piece of plastic garbage. That's value?

By the way, the L.R. Nelson Sprinkler Company will finish moving ALL production lines to China in the next two years. 450 former full-time workers - - who had benefits - - are on the street. Nelson President Dave Englinton does not beat around the bush: he blames the relocation and lost jobs on Wal-Mart. "Wal-Mart has said that they would love to buy from us because some of the product is [was] done in the United States, but the cost differential is so great that they told us that unless we supply them out of China, we couldn't do business."