1. Characteristics of Wal-Mart
→ American public corporation that runs a chain of large, discount department stores
→ founded by Sam Walton in 1962
→ largest private employer in the world
→ largest grocery retailer in US
- largest employers in US 1.9 billion employees
→ largest public corporation by revenue, according to 2007 Fortune Global 500 US$351.1 billion
→ operates under different names in different countries
- Walmex in Mexico
- ASDA in UK
- Seiyu in Japan
- Best Price in India
→ investments outside North America have had mixed results
- operations in South America and China are highly successful
- forced to pull out of Germany and South Korea when ventures there were unsuccessful
→ adopts low cost, global-sourcing business model
2. Spatial Organisation and Structure of Wal-Mart
Headquarters: Bentonville, Arkansas
35 supercenters in China
Global procurement center in ShenZhen
6000 global suppliers 80% in China
Retail Outlets
a. Wal-Mart Stores US
- largest division
Discount Stores
- carry general merchandise and selection of food
- as of December 2009, there are 810 of such stores In US
Supercenters
- hypermarkets with average land space of 197,000 square feet
- sell general merchandise
- full-service supermarket
- as of December 2009, 2737 supercenters in US
Neighborhood Markets
- full lines of groceries
- but limited general merchandise
b. Sam’s Club
→ chain of membership-only retail warehouse clubs
→ sell groceries and general merchandise
→ as of January 2009, Sam’s Club chain operated in 48 of the 50 US States, and has served more than 47 million US members
c. Wal-Mart International
→ 2980 stores in 14 countries outside US
→ contributes to 20.1% of sales, according to 2006 annual report
→ 1.8 million employees worldwide
3. Relationship between Wal-Mart and Home Economy
→ subsidies given to Wal-Mart from various states
lack to social services (police, firemen, schools)
→ drive away all other competition
→ seem as a non-contributor to city
→ dead land due to large size of empty abandoned outlet
no other countries can afford to loan or build on this land
26,699,678 square feet of dead land of empty Wal-Mart outlets
4. Impacts of Wal-Mart on the Host Country
a. Economic
→ creates more than 210,000 jobs in the US
→ food-at-home prices that were 9.1% lower and overall prices (as measured by the Consumer Price Index) that were 3.1% lower than they would have otherwise have been.
b. Social
→ Wal-Mart wages are lower than other retail wages
as of 2008, a full time worker at Wal-Mart earns 16% less than the average retail wage
not enough to support family
though Wal-Mart can increase wages by increasing the price even by 1¢
→ Inadequate healthcare plans
current health plans can only cover for 50.2% of their employees
too costly to afford
falls short of industrial average
forces employees to rely on public assistance to cover healthcare costs
→ Gender discrimination
women denied of promotions and paid less than men
even with the same qualifications, the female would earn 5 to 15% less than the male
→ Child Labor
long history of violating child labor laws
in June 2005, there were 11 violations in 3 Wal-Mart stores in the state
child workers were reportedly beaten for falling behind in their production goal
long hours with low pay with VERY poor living conditions
c. Environmental
→ violating water quality standards
Connecticut Department of Environmental Protection sued Wal-Mart over pesticide and fertilizer pollution in its rivers and streams in May 2000
when hard rains fall on the parking lot where they store the pesticides, the chemicals are carried into rivers and streams, affecting the health of plants, animals and people.
