Wal-Mart - The Big Ugly (UPDATED)

Darn it, Wal-Mart... Come ON

I've been grousing about (and resolutely not shopping at) Wal-Mart and Sam's Club for years, mainly for three reasons: (Put "allegedly" in all the legal places below - they don't like criticism.)

1. An early Wal-Mart store wiped out most of the local retailers in my small Texas home town.

2. Their treatment of suppliers has been vicious - becoming a small manufacturer's biggest client, then grinding down their prices by threatening to quit buying. Then - ultimately - taking their purchase of the product offshore, occasionally using the original U.S. supplier's design to define the outsourced product.

3. Their treatment of their own employees has been rough, too. Avoiding medical benefits by manipulating hours to keep a high percentage of their workers "part-time," thus ineligible, for instance.


Maybe. It's hard to know whether the better health care plan we read about is real or the results of the big bucks Wal-Mart has been spending on P.R. firms. Let's give them the benefit of the doubt since it makes biz sense to have a healthier and happier work force.

And the much publicized Wal-Mart energy efficiency movement, especially in the newer stores, might be real simply because it makes business sense. Using more skylights, switching to high efficiency lighting and using better insulation saves big bucks. Of course the P.R. spin is that this is is Wal-Mart "going green."


Seems that Wal-Mart is doing everything it can - including the completely unethical - to avoid paying state taxes it legitimately owes. For instance, in California, it's taken big deductions for dividends it never actually paid. And in North Carolina Wal-Mart has been playing footsie with the real estate trust rules. Plus, they have been bending these REIT rules in other states all over.

They are using the big accounting firm Ernst & Young (several Partners recently busted for tax shelter abuses) to pay about half of the state taxes they should.

The Wall Street Journal (still my favorite newspaper - I'm holding by breath) puts the truth in front of us in a front page article by JESSE DRUCKER today.

If you want the details how Wal-Mart keeps the cash from dozens of states which provide it a business-friendly environment to sell all that Chinese-manufactured stuff, read Drucker's piece. Then join me in staying away from this corporate octopus I now call The Big Ugly.

UPDATE (10.31-07): Now this: Wal-Mart is miffed that the public might actually figure out what it is up to in avoiding properly due taxes. So they are trying to cut off public access to their actions. Well, at least they are consistent. Way to go Jesse Drucker at the Wall Street Journal.


Sam Johnson said…
Willis, I am also down on Wal-Mart. I think they did more to kill small-town America that any company in history.

Not shopping their is a small thing, but it is a starting place.
Thanks for the thoughts,
Sam J.

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