Monday, November 19, 2007

Monday Morning Java

News, information, ideas and opinions to begin the week off with a jolt

Wal-Mart World Over Coffee

Business begins early in the morning for those who work for Wal-Mart, the world's largest corporation and retailer.

Lee Scott, Wal-Mart's CEO, says he arrives in his Bentonville, Arkansas office each morning at 6:25 a.m. when he isn't traveling. Scott says he chose that particular time because former CEO and current board member David Glass always arrived (and often still does when he comes into the offices) every day at 6:30 a.m. for the 13 years he was CEO.

Wal-Mart regional managers in the U.S. and the nine other countries in the world where the retailer has stores also begin their days very early in the morning. Most are said to be out their front doors at 5:30-6:30 am each morning, headed to a store in their car or to the airport.

The famous Wal-Mart Saturday morning management meetings in Bentonville also get started at the crack of dawn. Each Saturday, the morning-long meeting begins at 7:00 a.m., fueled by plenty of coffee. Further, Even Wal-Mart's annual shareholders meeting is an early morning affair. Unlike most corporate shareholders' meetings which start at about 9:00 a.m., Wal-Mart's begins at 7:00 a.m. And like the weekly managers meetings, hot coffee is abundant.

And lets not forget Wal-Mart suppliers, potential suppliers and other sellers. These folks all try to get early morning appointments at the Bentonville corporate headquarters, as it's said Wal-Mart buyers, in keeping with the company's early morning culture set by founder Sam Walton, are more likely to give a seller a good order or authorize their product line in the early morning compared to in the afternoon. It's the sellers version of the early bird getting the worm at Wal-Mart HQ.

Since Wal-Mart has this early morning culture, fueled by lots of coffee, we've decided it would be appropriate this morning to bring our readers some news, information and thoughts about the world of Wal-Mart this morning in Monday Morning Java.

Wal-Mart News, Opinions and More:

Grocery one of three key sales drivers for Wal-Mart

The role of grocery sales at Wal-Mart continues to demonstrate its importance to the retailer. Grocery sales for Wal-Mart's recently-ended third quarter were up more than 13%. Q-3 ended on October 31, 2007.

Supercenter grocery comp sales were up 5.3%, which played a big role in increasing Wal-Mart's overall comps by 1.5% for the third quarter, according to Eduardo Castro-Wright, Wal-Mart's chief of U.S. store operations.

Castro-Wright says grocery, health & wellness and entertainment are at present the three key drivers for the retailer's U.S. business. The three areas make up two-thirds of total category sales in U.S. stores, he said. Further, grocery sales account for a solid 40%-plus of those two thirds, according to Castro-Wright.

These third quarter numbers make it clear how important grocery is the Wal-Mart. Within grocery, the retailer also is making a new, major commitment to fresh foods, Castro-Wright says. In a conference call with the media last week, he pointed the to Wal-Mart's new Supercenter in Highland Park, Texas which opened last week, as an example of this new emphasis on fresh.

The new 203,000 square foot store features a fresh pastry shop, open-hearth oven bakery, and a large circular-style deli which features lots of fresh, prepared entrees, full meals and grab-and-go items, Castro-Wright says. He further commented this commitment to fresh will be played out in many of the new Supercenters the retailer opens this year and next. Included will be expanded fresh, prepared foods areas offering many meal solution options for shoppers, he said.

Wal-Mart overhauling it's employee health benefits coverage

Wal-Mart has been under attack from many sides the last few years over its employee health insurance plans. The retailer says it's listened to these critics, and sought out the advice of many experts including former U.S. President Bill Clinton, and will now overhaul its employee health and medical benefits coverage.

Wal-Mart says it will make more employees eligible for coverage, lower deductibles and co-payments, and create an overall better health insurance package for its employees. You can read the details of the retailer's plans in this New York Times story and decide for yourself.

Wal-Mart donates to Mexican flood relief

Wal-Mart, which is now the number one food retailer in Mexico, has donated $600.000 to the flood relief efforts in southern Mexico. There are 430 Wal-Mart employees missing after the heavy floods deluged the southern region. Wal-Mart's initial donation is double the $300,000 U.S. President George W. Bush has pledged thus far. Read more here.

New Wal-Mart 'eco-store' has in-store bike shop

The new Wal-Mart Supercenter in Highland Village, Texas, which opened two weeks ago, is the retailer's third "eco-friendly" "high-efficiency" store to open this year. The greener designed stores incorporate advanced environmental design and building principles and the use of energy efficient equipment in them, among other sustainable and conservation-oriented building measures and practices.

The new concept stores also incorporate localism in their design. For example, the Highland Village Supercenter has incorporated the area's local terrain not only into the store's physical design and landscaping, but also into the creation of a entirely new in-store department.

The neighborhood's in the Highland Village area are connected by a system of walking and biking trails. With that in mind, Wal-Mart has created a full-service, in-store bike shop inside the new Supercenter. It's the first of a kind for the retailer, and reflects its increased emphasis on the environment. The department offers a large selection of bikes and has a full-service bike repair shop staffed with trained bike mechanics. A rest area outside the bike shop features a gazebo with seats, a water fountain and free air hoses for bikers.

Wal-Mart ordered to pay legal fees in huge class action lawsuit

Wal-Mart has been ordered to pay 36.4 million in legal fees and expenses to attorneys representing Pennsylvania Wal-Mart workers who worked off the clock in the retailer's area stores. The class action suit involves 187,000 workers, and the total value of the judgement against Wal-Mart is $187.6 million at present. Read more about the lawsuit and related issues here.

Wal-Mart ups its Hispanic marketing profile with new partnership

Wal-Mart USA and Dallas, Texas-based Campero USA, the U.S. foodservice division of the popular Guatemalan-based chicken restaurant Pollo Campero, have struck a partnership in which Wal-Mart will lease space to the growing restaurant chain in its stores. The Latin American chicken restaurant chain is one of that region's largest, serving more than 75 million customers annually.

The deal, with Wal-mart as the landlord and Campero USA as the tenant, will locate Pollo Campero chicken restaurants in select Wal-Mart stores in the U.S. The focus will be on areas and neighborhoods that have a certain percentage of Hispanic residents. Gisel Ruiz, a v.p for Wal-Mart, says the deal will help the retailer to better serve the needs of Hispanic consumers. "Many of our Hispanic customers are Latin American," Ruiz says. "And they are among our fastest growing markets. We know Pollo Campero will add value to Wal-Mart with its premium Latin American restaurant brand.

Campero USA has been expanding throughout select regions of the U.S. with its poplar chicken restaurants. The Wal-Mart partnership should give it a huge strategic advantage as a young foodservice company in the USA. The chain has a goal of opening 500 restaurants in the U.S. by 2012. The new partnership with Wal-Mart will go a long way in helping the company to meet that goal, and will give Wal-Mart another key offering in its growing Hispanic marketing strategy and merchandising practice.

These ten states not the 'top-ten' for Wal-Mart

Writer and Wal-Mart critic Al Norman has a piece in the November 9 Huffington Post where he describes the ten states in the USA where Wal-Mart hasn't been able yet to build a Supercenter in the last couple years--but wants to. Those 10 states are: Idaho, Wyoming, New Mexico, South Dakota, Indiana, Vermont, Maine, Delaware, Rhode Island and Hawaii. Norman says proposed Wal-Mart Supercenters are under siege by community groups in these ten states, which is why no new stores have been build of late in the 10 states. You can read more here about Norman's take on what's going on in these 10 states and others regarding Wal-Mart Supercenter proposals.

A green giant warms up to Wal-Mart

Jeffery Hollander, CEO of green consumer products company Seventh Generation, has always said doing business with Wal-Mart would be to him like selling his company's soul. However, the chief of this $100 million a year privately held green consumer cleaning and household products company, is having second thoughts. Hollander recently told Fortune magazine he would consider selling his company's "eco-friendly" cleaning products, toilet paper, diapers and other items to Wal-Mart because the giant retailer is focusing on the environment more.

Hollander tells Fortune his change of heart came about because of the retailer's focus on sustainability issues as well as a private meeting he had with CEO Lee Scott last year. He also says Seventh Generation did an internal review of 17 retailers and graded each of them on their respective commitments to green business practices. It turns out Wal-Mart scored rather high in the review and analysis. Read more here.

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