What an Incredible Year!

In just twelve months, with the passionate work and commitment of hundreds of thousands of grassroots supporters, brave Wal-Mart workers, and the hard work of our campaign team, WakeUpWalMart.com is now one of the most exciting grassroots movements in America.

In fact, since April 5th 2005, we have organized over 4,000 grassroots actions, grown our campaign to 308,000 supporters, and seen Wal-Mart emerge as an important political and social issue.

From signing up over 30,000 new supporters in March to holding health care rallies in 35 cities in May, from rolling across the country in a 19 state, 35 city, 35 day bus tour to launching another 5-week non-stop holiday campaign, we have helped build a grassroots movement unlike any other in American history.

Click here for photos and details from the campaign's 2006 highlights.

Happy New Year, everyone!

From Business Week and the AP:

Wal-Mart Stores Inc., the world's biggest retailer, saw shares edge down nearly 2 percent during the year as the company worked on improving same-store sales and struggled to bolster its image with consumers...

Still, Wal-Mart continues to appeal to discount hunters, and the company instituted an aggressive discount campaign on prices for toys, consumer electronics and small appliances during the holiday season.

But same-store sales figures continued to sag.

In October, Wal-Mart said it would sharply reduce its rate of domestic expansion, in an effort to restore sales and profit growth in the U.S., its biggest market.

But in November, just before the crucial holiday sales season began, the company warned of a sales decline for the first time in 10 years and said same-store sales growth would be no better than 1 percent. In fact, it fell 0.1 percent. Wal-Mart expects December same-store sales to be flat to no more than 1 percent higher than last year.

The company suffered an internal marketing crisis late in the year, as Julie Roehm, senior vice president of marketing communications, left in December after less than a year on the job, and the company dropped its new ad agency -- Interpublic Group of Cos.' DraftFCB.

Wal-Mart expects to name a new ad agency by the beginning of January.

Its share price fell about 1.5 percent during the year, hitting a 52-week low of $42.31 on July 18, reaching a 52-week high of $52.15 on Oct. 23, and falling since then to close on Dec. 26 at $46.11.

From the AP and BusinessWeek:

The pouty Bratz dolls so popular as Christmas presents are made at a factory in southern China where workers are obliged to toil up to 94 hours a week, among other violations, a labor rights group said in a report released Friday.

The report by U.S.-based China Labor Watch and the National Labor Committee details allegations of harsh working conditions, especially during peak delivery months, and of violations of workers' rights to injury and health insurance...

Calls to the China-based spokesman for Wal-Mart Stores Inc., a main distributor of the dolls, went unanswered Friday.

The allegations in the report describe practices found at many Chinese factories producing name-brand products for export. They include required overtime exceeding the legal maximum of 36 hours a month, forcing workers to stay on the job to meet stringent production quotas and the denial of paid sick leave and other benefits.

The report shows copies of what it says are "cheat sheets" distributed to workers before auditors from Wal-Mart or other customers arrive to ensure the factory passes inspections intended to ensure the supplier meets labor standards.

It said workers at the factory intended to go on strike soon to protest plans by factory managers to put all employees on temporary contracts, denying them of legal protection required for long-term employees.

More than 120 million Bratz dolls have been sold since the toy debuted in 2001.

This week, we launched our final actions of our 2006 "Hope for the Holidays" campaign with grassroots actions at over 200 Wal-Mart stores in 60 cities and 19 states.

In addition, online already more than 22,000 supporters have signed our petition calling on Wal-Mart to adopt a zero tolerance policy on child labor. Over 10,000 of these signers just joined the WakeUpWalMart.com community, pushing our campaign to over 300,000 supporters.

During our actions this week, supporters in 60 towns and cities, including Crawfordsville, IN; Grand Rapids, MI; Providence, RI; Waterbury, CT; Milwaukee, WI; Salem, MA; Massillon, OH; Stockbridge, GA; Henderson, NV; Elk Grove Village, IL; Catonsville, MD; Philadelphia, PA; Cheyenne, WY; and Grand Junction, CO are passing out over 102,500 glossy new flyers about the company’s troubling record of having repeatedly broken child labor laws in America and overseas.

Overall, our six-week 2006 “Hope for the Holidays” campaign included over 1,172 grassroots actions (from prayer vigils to rallies to house parties) involving over 5,000 supporters, the distribution of over 400,000 flyers covering 925 Wal-Mart stores, and a TV ad campaign that targeted 43 media markets nationwide. In total, the 2006 “Hope for the Holidays” campaign was the most ambitious series of coordinated actions we have ever taken together as a community.

Thanks to all of you for your efforts to change Wal-Mart this holiday season. And welcome to those of you who recently joined us.

As if big business, Wal-Mart chief among them, did not get enough breaks already, this week President Bush signed into law a bill that gives Wal-Mart eliminated or reduced tariffs on a number of items.

From The Arkansas Morning News:

WASHINGTON -- President Bush on Thursday signed into law a wide-ranging bill that included hundreds of tax breaks on imported goods, including some benefiting Wal-Mart.

Wal-Mart will save on eliminated or reduced tariffs for clock radios, rubber floor mats and nail clippers among other items.

Broad tax legislation containing 520 tariff suspensions was approved on the last day of Congress' term earlier this month.

Critics of tariff suspensions charge they amount to special-interest legislation benefiting a small number of companies that profit from not having to pay fees on goods they import and then sell to U.S. consumers.

Others, like Sen. Blanche Lincoln, D-Ark., said the practice helps home-state interests and home-state jobs. She sponsored many of the provisions benefiting the giant Bentonville-based corporation.

"The process is a customary practice that is intended to make products that are not domestically produced more affordable to customers," Lincoln said in a statement. "I am happy to help any Arkansas company pass along savings to customers."
*

Congress passed more than 800 tariff suspension bills during its most recent term, estimated to cost hundreds of millions of dollars.

Lincoln also sponsored bills to reduce or eliminate tariffs for chemicals used by Ciba Chemicals, with operations in West Memphis, and Eastman Chemical Company, which has a plant in Batesville. Those tariff suspensions also were rolled into the legislation Bush signed into law.

In September, Lincoln backed away from another piece of legislation suspending tariffs on imported dog collars, leashes and muzzles. An upstate New York woman complained to the U.S. International Trade Commission the 2.4 percent tariff reduction could jeopardize her domestic operation. Tariffs are instituted not only as a way to generate revenue, but to also shield American manufacturers from foreign competition. Companies often request tariff suspensions when no domestic manufacturer produces an item.

The bill Bush signed into law suspends tariffs until 2009 for clock radios and AM radios without a clock. Tariffs for certain rubber floor mats and manicure/pedicure sets would fall from 2.7 percent and 4.1 percent, respectively, to 1.96 percent.

All four tariff measures were requested by Wal-Mart.

A Wal-Mart spokeswoman did not return a call Wednesday seeking comment.

The clock radio waiver was estimated to cost $855,000 annually in lost federal revenue, while the AM radio suspension will cost less than $3,000 annually, according to trade commission estimates.

Reductions on manicure sets were estimated to cost about $588,000 this year up to $770,000 in 2010. Lost revenue from the floor mat waiver is estimated at $784,000 by 2010.

Wal-Mart just can't seem to keep their advertising executives around. Less than two weeks after firing its top advertising executive, Julie Roehm, for "swirling stories of sex, bribery and lychee martinis" , Sam's Club's top advertising executive is gone as well.

Mark Goodman leaves just weeks into a huge advertising campaign by Sam's Club. As the article notes, Sam's Club has been trailing Costco in sales by nearly $20 billion, despite having more stores.

Trailing Costco
Sam's Club has fallen behind fast-growing Seattle-based Costco, the No. 1 warehouse retailer in the U.S. Costco has 504 stores and nearly $59 billion in sales, compared with Sam's 550 stores and $39.8 billion in sales in 2006, accounting for 12.7% of Wal-Mart's sales in 2006.

Wal-Mart's PR woes feature prominently in a number of Advertising Age's year-end stories. Indeed, it is the number one story of the year.

1 - The Wal-Mart saga
A $580 million review for the world's largest retailer would have made the list on its own merits. Dumping Bernstein-Rein and GSD&M for DraftFCB made it a touch more dramatic and made Draft the top contender for Ad Age's agency of the year. But when Julie Roehm and Sean Womack were fired and Draft along with them? We were ready to write a script and make this one movie of the year. But we're still waiting to see how this one ends.

Roehm is number six on the list of "10 who made their mark":

6 Julie Roehm
She started the year by leaving Chrysler and heading to Bentonville to serve as senior VP-marketing communications for Wal-Mart. We wondered at the time if she would fit in. The answer came, but not until after she validated Interpublic and put Chicago back on the map by tapping DraftFCB for Wal-Mart's $580 million account. Turns out she didn't fit in. Neither does Draft.

And finally, a quote of the year comes from Roehm as well:

"There is no improper relationship. Absolutely not. ... I’m meant to have slept with about half the men I’ve worked with, so I clearly get around, but I can tell you I’ve never experienced any of the benefits of that."

- Julie Roehm, former senior VP-marketing communications

Last week supporters from across the country held candlelight vigils from Mobile, Alabama to Gilroy, California to Columbia, South Carolina, Little Rock, Arkansas, and dozens more locations.

At the actions, Wal-Mart workers, faith leaders and other community activists spoke about the need for Wal-Mart to change its anti-family business practices this holiday season. Forty supporters braved the gusting winds and power outages in Seattle on Friday night while dozens of grassroots activists and faith leaders prayed for change in St. Louis, Missouri, Hadley, Massachusetts, Dayton, Ohio, Phoenix, Arizona and Raleigh, North Carolina, just to name a few.

From the Boston Herald:

BEIJING - Employees at the China headquarters of Wal-Mart Stores Inc. have set up a Communist Party branch, part of a growing campaign to expand the ruling party’s presence in foreign companies.

The move follows the success of China’s state-sanctioned labor body in setting up unions at Wal-Mart outlets this year. The company is one of China’s biggest and most prominent foreign employers, with a work force of 36,000 and 68 stores.

The party branch was set up Friday at Wal-Mart headquarters in the southern city of Shenzhen, according to the party newspaper People’s Daily and a Wal-Mart spokesman, Jonathan Dong.

“Quite a few of our associates are party members already, so they have a right to establish branch organizations,” he said.

Dong didn’t know whether Wal-Mart would have any formal interaction with the branch or whether its establishment would affect operations. Employees who answered the phone at the party’s Shenzhen office and wouldn’t give their names said they had no information on what the branch at the Wal-Mart headquarters would do.

Several of Wal-Mart’s Chinese stores already have Communist Party branches. The first was set up Aug. 12 in the northeastern city of Shenyang.

The party branch there has said it would not interfere in store management. An official quoted by the state Xinhua News Agency said it would encourage members “to play an exemplary role in doing a good job” and to help the company grow.

Many foreign companies in China already have party branches, either officially or unofficially.

China’s 70 million-member Communist Party and its affiliated All-China Federation of Trade Unions, or ACFTU, are trying to expand their presence in foreign companies to keep pace with a fast-changing society amid capitalist-style economic reform.

State industry, their traditional base, has slashed millions of jobs while private companies are creating tens of millions more. In a bid to stay relevant, the party has begun offering membership to entrepreneurs and others in the new private economy.

Wal-Mart, based in Bentonville, Ark., resisted the creation of unions at its Chinese stores for two years before agreeing in August to help the ACFTU organize its workers. The company has few unions elsewhere in its worldwide operations.

The party and labor expansion campaigns were ordered in March by President Hu Jintao, who also is the party’s general secretary, according to Chinese media.

“Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises,” the order said, according to the newspaper Beijing News.

The Rev. Joe Phelps, Pastor of Highland Baptist Church in Louisville, Kentucky, wrote this op-ed in today's Courier Journal.

I accepted a unique invitation to appear in a 30-second "Wake Up Wal-Mart" commercial. It will appear across the nation on major television networks this Thursday and Friday.

"Wake Up Wal-Mart" (wakeupwalmart.com) is a national campaign that challenges the country's largest retailer to clean up its act on multiple fronts, particularly in matters that adversely affect its 1.4 million employees.

Why would a minister appear in such an ad campaign?

I accepted the chance to speak to millions of Americans because of my pastoral role of evangelist — one who announces the message of God's agenda as seen in the life of our Savior, Jesus.

The Bible is full of God's passion about the livelihood and welfare of workers, their families, and their communities. At the same time, God also expresses grave concern for employers who exploit their workers. For the God of the Bible, words like peace and truth aren't abstract ideals; they are to be lived out in how we interact with God and each other, not just on Sunday, but every day.

And so my long-standing concerns about Wal-Mart as an employer, a community leader, and a global force prompted me to join those trying to "Wake Up" (the campaign's name) the retail giant to do the right thing. I want Wal-Mart to honestly review if their profit-making has deteriorated into greed and exploitation.

I also want to "wake up" the American consumer, especially those with Bible values, to the reality that our buying power has real power to effect a lot of people around the world. Everyone wants lower prices, but not at the expense of neighbors who work for Wal-Mart, or people around the world who make their products. Our purchasing choices are the crucial link in granting companies like Wal-Mart our tacit permission and our financial support to continue practices that exploit the young, the vulnerable, and the working poor.

There are two sides to the Wal-Mart debate, of course. Google "Wal-Mart defense" and you'll find plenty of opinions about how Wal-Mart is good for workers and for our country. Wal-Mart has a major marketing initiative, backed by millions of dollars and a staff of 70, to convince consumers that it is a benevolent corporation. Their arguments remind me of the lawyer reacting to Jesus' instruction to love your neighbor, "But wanting to justify himself, he asked Jesus, `And who is my neighbor?'"

On the other side is a vast collection of data from workers, consumer watch organizations, and investigations that reveals a pattern of exploiting workers in order to cut costs and hike profits.

Those who care will weigh the arguments on both sides, pray, discern and act.

In the ad I ask, "Would Jesus shop at Wal-Mart?" It's admittedly a haughty- sounding question, but one that must be asked. I don't claim to know the answer for everyone. I do, however, think it is a question worth posing.

Some will be offended by the question, or at least by its implication, especially if they draw different conclusions from the evidence. Or if they are staunch supporters of unfettered capitalism. Or if, like me, they've shopped at Wal-Mart in the past with no guilt about finding a desired product at a low price — especially if its the only store in town, as is often the case in small towns across America.

Others will be annoyed at the idea that there are connections between the store's low prices, the effect of their employment practices in America, and the effect on the overtime worker in China who earns $3.45 a day making Wal-Mart products.

Still others will wonder why a minister would worry about Wal-Mart's business practices instead of sticking to the task of saving souls.

A century old Baptist in my church's stained glass windows faced a similar challenge. Walter Rauschenbusch concluded that it was hypocritical for the church to try to save the souls of factory workers if it didn't also support living wages for the workers' families. For him, the two were intrinsically connected.

For me, the answer to "Would Jesus shop at Wal-Mart?" is: Probably not at the present, not with its current business practices. I believe it is an insult to God to say we believe the Golden Rule, "do unto others as you would have them do unto you," and then purposely ignore the implications of our shopping choices. What we buy matters to others and to God.

And so in the ad I ask viewers to "search your own heart." For me, once I know, I have to say no — especially at Christmas, when we recall Mary's song at the news that she would bear the Savior.

He has scattered the proud in the thoughts of their hearts.

He has brought down the powerful from their thrones,

and lifted up the lowly.

Your heart may be at peace with shopping at Wal-Mart. Each of us must follow the Spirit's leading. I'm not qualified to tell you what the Spirit says to you. I can only bear witness, wherever I can, to what the Spirit says to me.

Joe Phelps is Pastor of Highland Baptist Church in Louisville, Kentucky.

Today, we launched our latest "Hope for the Holidays" campaign initiative, "America, Pray for Wal-Mart to Change," with coordinated candlelight vigils in 10 states, a new television ad, "Search you Heart," and the release of a letter signed by 131 evangelical ministers.

The Baptist Center for Ethics, WakeUpWalMart.com, and evangelical leaders from across the county have joined together in calling on Wal-Mart to change inot a responsible and moral business.

Evangelical leaders, such as Robert Parham (Executive Director of the Baptist Center of Ethics) and Tony Campolo joined together in sending a message to Wal-Mart CEO Lee Scott:

Dear Mr. Scott,

We write you as moral theologians with grave concerns about Wal-Mart’s corporate practices-practices that conflict with our commitment to pro-family values.

The Christian prophetic witness teaches that justice is the highest family value for any society-protection for the fatherless, security for the single mother, honesty in the marketplace, fairness for the weakest one in society, respect for the elderly.

The Hebrew prophet Micah said that God required justice (Micah 6:8). The prophet Amos said that God wanted justice to flood the land (Amos 5:24). The prophet Isaiah said that God wanted his people to seek justice (Isaiah 1:17). Jesus told community leaders that they were neglecting justice (Luke 11:42).

The biblical witness also teaches responsibility-parents are responsible for children (Deuteronomy 6:4-9) and employers are responsible for fair wages for their employees (1 Timothy 5:18). Jesus said, “From everyone to whom much has been given, much will be required; and from the one to whom much has been entrusted, even more will be demanded” (Luke 12:48).

From the San Francisco Chronicle:

Liberal and progressive Christian groups say a new computer game in which players must either convert or kill non-Christians is the wrong gift to give this holiday season and that Wal-Mart, a major video game retailer, should yank it off its shelves.

The Campaign to Defend the Constitution and the Christian Alliance for Progress, two online political groups, plan to demand today that Wal-Mart dump Left Behind: Eternal Forces, a PC game inspired by a series of fictional Christian novels that are hugely popular, especially with teens.

From AdAge.com:

CINCINNATI (AdAge.com) -- Sam Walton must be rolling in his grave. The big question is what his son, Rob Walton, chairman of Wal-Mart Stores, will do about it.

More specifically, can CEO Lee Scott -- and the people he hired to fix Wal-Mart's marketing and merchandising problems -- survive?

Wal-Mart culture

Almost nothing could be more contrary to Wal-Mart's culture and heritage than a high-profile marketing executive seen taking rides in high-priced cars with current and potential vendors or accused in the press of accepting expensive entertainment and gratuities from them.

The man known affectionately as Mr. Sam to this day within Wal-Mart put in place what may be the strictest vendor-buyer ethics code in history. "Wal-Mart's drive to avoid even the appearance of impropriety has made the entire consumer universe among the most ethical business sectors anywhere," said Bradford C. Kirk, now chief operating officer of hair-care marketer Marc Anthony, in his 2003 book "Lessons from a Chief Marketing Officer." A veteran of 20th Century Fox and major package-goods marketers, he has basis for comparison.

Of course, that was before former Wal-Mart No. 2 executive Tom Coughlin pleaded guilty to wire fraud and tax evasion earlier this year in a scandal heavily laden with vendor gratuities.

Multiple incidents

The scandalous fall of Julie Roehm is just the most recent embarrassing incident in a drumbeat of bad news this year for Wal-Mart. That's included shrinking same-store sales in November; a fake blog from independent PR shop Edelman; embarrassing leaks of internal personnel memos; and a resilient political opposition that, far from being neutralized by Wal-Mart's spin machine, is attracting support from possible Democratic presidential hopefuls and running a hard-hitting holiday ad featuring highly critical Wal-Mart employees.

Ms. Roehm's firing is also the latest abrupt reversal in a marketing strategy that has looked rudderless, seeming to list from upscale suburban sushi eaters one week to smiley-faced rollbacks on canned tuna the next.

A senior executive at one Wal-Mart supplier said the retailer's growing crisis was a major subject of conversation among senior retail and package-goods executives at a gathering last week. He compared Lee Scott to George W. Bush and suggested Mr. Scott needs to appoint his own equivalent of the Iraq Study Group -- this one made up of respected business executives, experts and high-profile critics -- to recommend a way out of his own quagmire. "If he doesn't, he should be replaced immediately."

Strategic and cultural malaise

Strong words, but he said it's hard to overstate Wal-Mart's strategic and cultural malaise. "They have an identity crisis," he said. "I don't think they understand who their shopper is. Or if they do, they're not satisfied with who their shopper is."

In past years, when Wal-Mart's holiday sales disappointed, other senior executives departed by the following spring. VP-General Merchandise Don Harris left in early 2004. The following year, it was Chief Marketing Officer Bob Connolly -- just before scandal engulfed Mr. Coughlin.

But while Mr. Coughlin was long seen as a rival of Mr. Scott's, Ms. Roehm was clearly part of his team. Mr. Scott publicly criticized Wal-Mart's past marketing after bringing in John Fleming from Walmart.com as chief marketing officer in 2005 to help fix the bricks-and-mortar operation. Mr. Scott authorized Mr. Fleming to staff up Wal-Mart's marketing department for what he said would be a world-class effort.

Leslie Dach from Edelman

He also brought in former Democratic operative and Edelman public-relations executive Leslie Dach as exec VP-government relations and corporate affairs to help Wal-Mart neutralize critics on the left. Now it faces growing criticism from the right, too, from the likes of the American Family Association.

One factor that could keep Mr. Scott and other top executives in place despite the problems they face is that seemingly all potential successors also are tainted by performance issues or association with discredited executives.

Vice Chairman John Menzer, long seen as the leading candidate to succeed Mr. Scott, heads the struggling U.S. operations. His fast-rising deputy, Eduardo Castro-Wright, runs the troubled Wal-Mart Stores division.

Mr. Menzer left behind an international division that Vice Chairman Michael Duke has had to fix . But Mr. Menzer also inherited a slowing U.S. operation from Mr. Duke.

Top merchandising officer

Beneath them, Doug Degn, the top merchandising officer, widely respected by suppliers, has been hampered by a close past association with Mr. Coughlin, one supplier executive said. Claire Watts, exec VP-product development, apparel and home furnishings, has the now-discredited national Metro 7 rollout on her resume.

It may say something about how removed Ms. Roehm was from the local culture that her departure and its circumstances haven't been the subject of much local gossip, despite the national attention, one Bentonville sales rep said. But he expects Wal-Mart buyers-always cautious about avoiding the least appearance of impropriety -- to be even more so for the next several months. When they get a bottled water out of his refrigerator, he said, they'll probably leave a quarter or two on his desk.

Before we get started with this week's "Hope for the Holidays" campaign action, let's take a quick peek at last week's Wal-Mart news in brief.

Try Marketing This
Wal-Mart fired its new ad agency, DraftFCB, less than one month after hiring them. This right after they canned their top marketing executive, Julie Roehm, less than a year after she joined Wal-Mart.

Perhaps Roehm and DraftFCB had trouble trying to market this:

- Wal-Mart workers continue to speak out, telling the American people the truth about the company's anti-family policies, at press conferences and in this new TV ad , "1,000 Years."

- Yet another class action lawsuit, this time in Kentucky.

- Wal-Mart continues to push workers onto public health care programs, yet again leading the public health care rolls in a new Washington state report.

- The revelation that several Chinese suppliers of Wal-Mart fail to pay legally required wages or provide health insurance and allow poor working conditions in China.

- The continued grassroots citizen protests across the country, from the public outcry in Littleton, Colorado to grassroots activists in Damariscotta, Maine and other cities.

No amount of marketing can cover up these facts. The American people want real, substantive change from Wal-Mart. Now that is something you could market.

From the Associated Press:

BEIJING -- Several Chinese suppliers of Wal-Mart Stores Inc. fail to pay legally required wages or provide health insurance and allow poor working conditions, a Hong Kong-based labor group says.

A Wal-Mart spokesman said Friday it was looking into the claims in a report issued this week by China Labor Watch. Managers at two companies cited in the report denied the accusations.

China Labor Watch said a survey of 15 Wal-Mart suppliers found that some pay as little as half the minimum daily wage, require mandatory overtime or provide no health insurance. It said one company provides a single bathroom for 2,000 employees.

The status of employees at foreign companies or their suppliers is a sensitive issue in China.

"We treat the issues as mentioned in this report seriously and will look into them. If found true, we will address them in an aggressive manner," a Wal-Mart spokesman, Jonathan Dong, said in an e-mail.

"Wal-Mart is committed to ethical sourcing and works continuously to strengthen our efforts in monitoring supplier factories," he said. Wal-Mart, the world's biggest retailer, is based in Bentonville, Ark.

Dong said he couldn't immediately confirm whether the companies cited by China Labor Watch were Wal-Mart suppliers.

The group said its report was based on a survey of 169 employees at 15 companies.

It said one employer, Winbo Industry Co., pays as little as 2 yuan (25 cents) per hour -- less than half the legal minimum of 4.66 yuan (58 cents) in Guangdong province, where its factory is located.

It said Winbo and others fined employees up to one hour's pay for being one minute late to work, are overdue in paying back wages and have threatened to fire those who fail to work overtime.

Winbo's foreign trade manager denied the accusations.

"The information you had is totally wrong and Wal-Mart is not our customer," said the manager, who would give only his surname, Zhuang.

The manager of another company cited, Yongfeng Shoe Manufacturing Co., also denied the claims.

"We never owed wages to workers and workers' wages are based on regulations," said the manager, Hu Tianfei. He said the company has been a Wal-Mart supplier for 10 years.

Phone calls on Friday to the other two companies identified by name in the report -- Taishan Watch Factory and Taiqiang Manufacturing Factory -- weren't answered. All the companies cited in the report are located in the southern province of Guangdong, the site of thousands of small factories that supply China's export industries.

Wal-Mart is a prominent presence in China, with 68 stores and 36,000 employees, and in 2004 bought $18 billion worth of Chinese goods, such as shoes and furniture, either directly or indirectly for sale abroad.

Worldwide, Wal-Mart audited 13,600 of its suppliers' factories last year, according to Dong, the spokesman at its China headquarters in the southern city of Shenzhen.

Wal-Mart was the target this year of a union-organizing campaign by China's government-sanctioned labor group.

After resisting unionizing efforts for two years, the company agreed in August to cooperate with the All-China Federation of Trade Unions to set up unions at all of its China outlets.

Also this year, Apple Computer Inc. was caught up in a controversy over claims of abuses at a Chinese factory run by a Taiwanese company that produces its iPod music players.

Apple issued a report in August saying it found some violations of its code of conduct at the factory run by a subsidiary of Taiwan's Foxconn Technology Group but no serious abuses.

From Bloomberg:

A union-funded campaign attacking Wal-Mart Stores Inc. accelerated Thursday with the debut of its latest television advertisement in 42 cities, the organization's largest-ever broadcast effort.

The TV spot sponsored by activist group Wake-Up Wal-Mart shows a woman shocked to hear it would take her 1,000 years to make the $17.5 million Chief Executive H. Lee Scott earned in fiscal 2005. Wake-Up Wal-Mart is funded by the United Food and Commercial Workers union.

Wake-Up Wal-Mart is spending $1 million for a four-week campaign that calls on the company to boost wages and benefits. The ad will air on network stations in Chicago, Atlanta, St. Louis and 39 other cities for about a week, Paul Blank, Wake-Up Wal-Mart's campaign director, said Thursday.

"We are targeting the people who don't yet know Wal-Mart's negative impact, who, if they knew, would look at Wal-Mart a different way," Blank said.

The group is also distributing 100,000 brochures with information about the largest-ever sex-discrimination lawsuit Wal-Mart is facing, involving 1.6 million workers.

"While our critics continue to offer nothing but negativity through these ads, Wal-Mart provides real solutions to the problems facing this country, and Americans see the positive impact we're having," said Wal-Mart spokesman David Tovar.

Wake-Up Wal-Mart has sponsored events by politicians including Sen. Barack Obama and former Sen. John Edwards (D-N.C.). They are two possible 2008 presidential candidates who have criticized the retailer's treatment of its workers.

The latest campaign by Wake-Up Wal-Mart comes at a time when sales growth at the company has slowed.

Wal-Mart expects December sales at stores open at least a year may rise between 0 percent and 1 percent. That would be the third month in a row gains failed to exceed 1 percent. Such sales, called same-store sales, are considered a key indicator of a retailer's health.

The “Women and Families Deserve Better than Wal-Mart” national day of action kicked off with coordinated press conferences in 8 states and the distribution of over 100,000 pink flyers in over 20 states. Both the flyers and the press conferences highlighted the terrible price women, children, and families pay every day because of Wal-Mart’s immoral business practices.

From the press conferences in East Meadows, NY and Hartford, CT:

Statement by Martha Burk, Director of the Corporate Accountability Project at the National Council of Women's Organizations – representing over 300 women’s organizations and 10 million women.

The Holiday Season is a special time for Americans. It is a time for giving and sharing. It is a time for all of us, whether as individuals or as corporations, to recognize and embrace the opportunity to improve the lives of others. Unfortunately Wal-Mart, as America's largest private employer, continues to ignore its special responsibility to improve the lives of its workers and their families.

Because of its size and influence on American workplace practices, Wal-Mart has a responsibility to not only reflect the best of America's values, but to be a model employer that puts families first. A company with $11.2 billion in profits should not offer empty excuses as to why it cannot treat its employees, including the over 700,000 female workers, many of whom are parents raising children alone, with the dignity, respect, and fairness they deserve.

Over the past year, Wal-Mart has adopted some of the most anti-family policies in the company's history...

Today, Wal-Mart Associates, all of whom who work hard to support their families, face a Wal-Mart where vicious salary caps have been imposed, a cruel open availability scheduling policy is the norm, low-deductible health care plans have been eliminated, an attendance policy that punishes workers for taking a day off to care for a sick child has been adopted, and hundreds of thousands of full-time Wal-Mart workers have been shifted to lower wage part-time jobs.

As if these anti-family policies weren’t enough, Wal-Mart in 2006 has left over half of its workers without company provided health care, has broken child labor laws, and has yet to settle the largest gender discrimination lawsuit in U.S. history.

Wal-Mart has a choice to make this holiday season. It can continue on a greedy and immoral path or it can do what is right and become the model employer we know it can become.

In the spirit of the holiday season, we call on Wal-Mart to immediately reverse its recent anti-family actions, such as the salary caps and punitive attendance policies. The company must also adopt a zero tolerance policy on child labor violations, and institute practices that ensure gender equality and respect are the norm at Wal-Mart.

In the spirit of the holiday season, we urge Wal-Mart to embrace this simple truth "with great wealth comes great responsibility." And, Wal-Mart's great responsibility is to be an employer whose record and business policies reflect the best of American family values every single day.

From the Seattle Post-Intelligencer:

As a mother, grandmother and now even great-grandmother I have lots of shopping I want to do for this holiday season. This is a busy time of year and there is much I'd love to buy. Like many others, I don't have enough money to do it all, so I have to think before I shop.

I have to think about what to buy and where to shop. Good quality and affordable price are major considerations but they are not the only important things. I want my choices to be for the good of my family and my community, and women are an incredibly important part of my community.

So, despite the lure of low prices, I'm joining other women in Seattle on Thursday to urge shoppers to think before they shop at Wal-Mart.

I won't be shopping at Wal-Mart because Wal-Mart really is bad for women.

Of course, discrimination against women is common in corporate America and I can't guarantee that every place I shop treats women well. But Wal-Mart is the world's largest employer and one of the worst abusers of its women employees in the U.S.

It isn't just that Wal-Mart doesn't pay a living wage; it's that they pay women even less than men in the same positions. Women make up more than 70 percent of Wal-Mart's hourly employees but less than one-third of its store management. Only one of its top 20 officers is a woman. And, in 2001, the few women who become managers earned $14,500 less than their male counterparts. Women hourly workers earned $1,100 less than men. These are a few of the reasons Wal-Mart is the subject of the largest class-action suit ever in this country. The lawsuit represents more than 1.5 million present and past employees of Wal-Mart and its affiliate, Sam's Club.

It goes beyond that. This year, Wal-Mart instituted a salary cap on its employees so they can only earn so much. Wal-Mart now uses more part-time workers. If you work fewer than 34 hrs/week, you have to wait a year before being eligible for health insurance and, even then, your children cannot be included in the coverage. Full-time employees have to wait 180 days before they become eligible for health benefits. That's six months before you or your children can go to a doctor for any reason, even an emergency. Should a woman be one of the lucky ones who is eligible, and can afford to buy the insurance, she will learn that her health plan does not cover contraception.

We women are the shoppers in this country. In particular we are the ones who are most likely responsible for buying the basics -- food, clothing, shoes, school supplies, toilet paper and toys. These are the things Wal-Mart sells. If I choose to save money on each item by shopping at a Wal-Mart where the woman waiting on me can't afford day care, health care, food or even the contraceptives that might keep her family from growing larger than she can support, I am hurting her and a lot of other women. That is not good for me, my family or my community.

I know most of the women working at Wal-Mart are thankful they have a job, even one that underpays and possibly mistreats them. That is no reason for us to sit back and let the abuse continue.

Together, we can change Wal-Mart. Please think before you shop. You can learn about NOW work at now.org/issues/wfw/wal-mart.

Thalia Syracopoulos is a member of the board of the Seattle chapter of the National Organization for Women.

Saturday Night Live took on "Sale-Mart" last weekend. Click below to watch it:

From the New York Times:

Faced with public demonstrations of discontent by its employees, Wal-Mart Stores has developed a wide-ranging new program intended to show that it appreciates its 1.3 million workers in the United States and to encourage them to air their grievances.

As part of the effort, Wal-Mart managers at 4,000 stores will meet with 10 rank-and-file workers every week and extend an additional 10 percent discount on a single item during the holidays to all its employees, beyond the normal 10 percent employee discount.

The program, described in an internal company document, was created during a volatile six months period, starting when the company instituted a set of sweeping changes in how it managed its workers.

Over that time, Wal-Mart has sought to create a cheaper, more flexible labor force by capping wages, using more part-time employees, scheduling more workers at nights and weekends, and cracking down on unexcused days off.

The policies angered many long-time employees, who complained that the changes would reduce their pay and disrupt their families’ lives...

Workers even staged small rallies in Nitro, W. Va., and Hialeah Gardens, Fla., the only such protests in recent memory.

The portion of the new outreach program called “Associates Out in Front” is described in company documents as a way for Wal-Mart to show workers “that we do appreciate you and that we have an ongoing commitment to listening to and addressing your concerns.”

The documents were provided to The New York Times by WakeUpWalMart.com, a group funded by the United Food and Commercial Workers union, which fears that Wal-Mart will undermine unionized stores.

The program includes several new perks “as a way of saying thank you” to workers, like a special polo shirt after 20 years of service and a “premium holiday,” when Wal-Mart pays a portion of health insurance premiums for covered employees. Sarah Clark, a spokeswoman for Wal-Mart, said the program was a “a more formalized, contemporary approach” to communicating with and collecting feedback from its fast-growing work force.

But she said it was not a response to workers’ concerns about new company policies. The Associates Out in Front program, much of which is not described in the documents, she said, “is about building on something that is already very good.”

In interviews, half a dozen Wal-Mart workers said there was a growing perception within the company that managers did not respond to employees’ ideas and complaints.

Kory Uselton, a 35-year-old overnight floor cleaner at a Wal-Mart in Tyler, Tex., said his store manager offered “robotic” company-approved responses during a recent meeting when workers questioned the new attendance policy, which originally called for disciplinary action after three unauthorized absences (although it was later revised to four unexcused absences).

Asked if absence for a family emergency, like a sick child, would be authorized, Mr. Uselton recounted, the manager said, “No, it’s not.”

“Many of the associates were very upset,” Mr. Uselton said. “Management is just not listening anymore.” Some Wal-Mart employees said workers might be afraid to speak up because they have seen coworkers retaliated against — for instance, transferred to worse shifts when they voiced their complaints.

Ms. Clark said Wal-Mart already had several systems in place that allowed employees to criticize company practices. Among other things, she said, there was a toll-free hotline workers could call to report ethical lapses, a Web site on which chief executive H. Lee Scott Jr. answered questions and a policy, known as the “open door,” that permitted anyone to bring complaints to officers at the highest level of the company.

Industry analysts and labor experts generally praised Wal-Mart’s new employee outreach effort, which they said appeared to imitate practices from companies known for cultivating a healthy relationship between managers and employees.

“When you look at the list of best employers,” said Richard W. Hurd, a professor of industrial and labor relations at Cornell University, “you will find programs that look something like this.”

The question, he said, “is how sincere the effort is and how much change you see in workers’ lives.”

But he said the perks, like the 10 percent discount and the shirt for long-time workers, are “a very token, modest form of appreciation. It is not sufficient.”

Adrianne Shapira, a retail analyst at Goldman Sachs who tracks Wal-Mart, cautioned that, whatever the reasons for the new program, the pace of change at the company carried its own hazards.

“I think they are asking a lot of their people right now,” she said. “It’s a lot of change in a short period of time at an already hectic time of year. It has to be pretty challenging for workers.”

The Associates Out in Front program, which Wal-Mart is introducing over the holiday season, was developed by company executives about seven months ago, Ms. Clark said. It is, in part, the result of recommendations from a group called the Care Council, 700 Wal-Mart workers who advise executives on ways to improve working conditions.

Under the program, store managers are to meet each week with 10 employees who sign up to discuss concerns, suggestions and ideas for improving operations. The program also requires regional general managers to conduct monthly town-hall meetings that are open to every worker in the area.

A new management training program, called “Leaders Out in Front,” is intended to encourage hourly workers to advance their careers and help existing managers become “better ambassadors and mentors,” according to the memo.

Not all of these perks are new. During previous holiday seasons, Wal-Mart has paid health care premiums and offered an additional 10 percent discount. But they were sporadic or at store managers’ discretion, rather than offered annually across the chain, said Ms. Clark, the spokeswoman.

Other perks, like a shirt that states length of employment in five-year increments starting with 20 years of service, appear designed to build morale, but might do the opposite.

Cleo Forward, a 37-year-old support manager at a Wal-Mart in Dallas, said the new program was promising, but that it fell short in recognizing long-time workers who felt unappreciated by the changes.

“They are going to spend $15 on a Polo for you after 20 years? Give me a break,” he said. “We would rather they lift the wage caps.”

Still, Mr. Forward said, he would like to be able to resolve his problems inside the company — and viewed Associates Out in Front as step in the right direction. “Maybe the company is willing to listen,” he said. “If that is so, I am happy. I want to be part of that process.”

Jay Leno this week on Wal-Mart's new sales numbers:

Here’s some bad news: Wal-Mart has reported that its pre-Christmas sales were down in November. Well, thank God that doesn’t affect anything made in America.

From the Associated Press:

NEW YORK - Remember when Wal-Mart was talked about as the retailer where America shopped? At least in recent months, it looks like consumers increasingly have taken their money elsewhere.

Wal-Mart Stores Inc. should be a dominant force during the all-important holiday season, but instead it has tallied terrible results. Its same-store sales fell for the first time in a decade in November and it is forecasting anemic growth this month as well.

Blame for such missteps can't go just to the slowing U.S. economy. Wal-Mart's reputation as a difficult employer and the growing perception that it doesn't always offer the lowest prices have led consumers to shop at competitors of the world's largest retailer.

Given Wal-Mart's size and power, what it does matters. With more than 6,600 stores worldwide and sales for 2006 estimated to average out to just under $1 billion a day, the Bentonville, Ark., discount chain has long been considered an industry and economic bellwether.

But its recent woes show a vulnerable side to this retailing behemoth. Maybe Wal-Mart's problems are just Wal-Mart's problems.

Its November same-store sales dipped 0.1 percent, marking the third consecutive month of disappointing results. Those weak sales came despite Wal-Mart's price cuts on toys, electronics and other items in an attempt to draw shoppers.

For the heart of the holiday season, Wal-Mart is expecting December same-store sales to be flat to no more than 1 percent higher than a year earlier. The company blamed weak sales of apparel and a slump in its home furnishings business.

The initial take on Wall Street earlier in the week - when Wal-Mart tipped its hand that November wasn't looking good - was that the weakness was symptomatic of a slowdown in overall economic growth. The stock market sold off on the idea that the housing market correction coupled with an uncertain jobs outlook might be spurring consumers to hold off on some spending.

But for that argument to hold up, there should be other warning signs as well - and there aren't. Consumer spending has picked up in recent months as gas prices have dropped, and new retail sales show strong results from other merchants.

Rival discount chain Target Corp. tallied better-than-expected same-store sales of 5.9 percent in November. Shoppers scooped up its trendy offerings even though they bypassed them at Wal-Mart. The department store chains also fared well, including the 8.9 percent gain at Federated Department Stores Inc., which also boosted its December sales forecast.

"We are beginning to question if its (Wal-Mart's) sales issues are broader and more secular than we are currently being led to believe," JPMorgan retail analyst Charles Grom said.

One big issue plaguing Wal-Mart has to do with its prices. Consumers long believed if they shopped at Wal-Mart, they got the best price. And they were willing to put up with dated stores and sloppy displays so long as they were paying less.

But this year, that might not have held true. While the company has started remodeling - which also has turned off shoppers because of the disruption to the stores - most stores haven't been redone yet. At the same time, Wal-Mart hasn't always offered the lowest prices.

The discounter failed terribly when it attempted to attract higher-income shoppers by offering more fashionable items such as clothes that were sold at higher price points. It also shifted its advertising away from a low-price focus, but now is emphasizing cost again.

In the meantime, its competitors intensified their price-cutting on the same or similar items sold at Wal-Mart, including food and grocery items. That was especially true over Thanksgiving weekend.

Wal-Mart started discounting toys in October and electronics in early November, hoping to "gain mind share" as the low-price leader over the holiday season, according to Goldman Sachs analyst Adrianne Shapira.

But then it failed to deliver as competitors offered better deals on Black Friday and through last weekend. "The rest of the world caught up in promotions when it mattered and margins were hit across the board," Shapira said, noting that its biggest declines in customer traffic came during the week of Thanksgiving.

Also at issue is whether Wal-Mart has expanded so much over the last four decades that finding new store locations and capturing additional sales in certain categories are becoming increasingly difficult.

As Merrill Lynch's Virginia Genereux noted, Wal-Mart could have hit a "market-share wall" - since it might not be able to see much more upside to its 30 percent of share of such things as men's underwear and pet food, or in certain markets like Springfield, Mo.

Then there is Wal-Mart's publicity problem. Two years ago, a poll of 1,800 shoppers found that 2 percent to 8 percent of respondents said they had stopped shopping at the retailer because of negative press. The findings came in a report to Wal-Mart by consulting firm McKinsey & Co.

That decline was before the recent onslaught of attacks from two union-backed groups, WakeUpWalMart.com and Wal-Mart Watch, which have gotten lots of media attention for taking on Wal-Mart's treatment of workers so publicly. Wal-Mart bashing was also popular on the campaign trail during this election season.

Wal-Mart has fought back through its own intensified public relations effort. "We continue to create jobs, advance careers and enhance communities across the country," Wal-Mart CEO Lee Scott said during the Nov. 14 third-quarter earnings call.

Of course, no one should write off Wal-Mart yet. It is big. It is strong. It is resilient. It is in many of the nation's neighborhoods, catering to many of the nation's shoppers. No other chain comes even close to the sway that it has over American consumers.

A year from now a different Wal-Mart story could be told, one of better times ahead. For that to really happen, though, the retailer might want to review how it got where it is today, and what shoppers have long looked for in its stores.

From the Seattle Times:

NEW YORK — Wal-Mart's holiday sales used to be the retail industry's gold standard.

Through a mixture of bad judgment and economic woes like a crumbling housing market and higher gas prices, Wal-Mart tripped this year. And its fall is sending shock waves throughout the industry as it heads into the last few weeks of holiday shopping.

Wal-Mart on Thursday reported a sales decline for the first time in 10 years and warned that its holiday sales would be disappointing. At the same time, the government had worrisome news on jobs, saying unemployment-benefit gains jumped to the highest level since October 2005.

Many retailers probably didn't want to hear the messages from Wal-Mart and the Labor Department because they may spell trouble for them, too.

Industry analysts generally think the world's largest retailer is struggling with its own internal problems, not an industrywide malaise. But bad news for Wal-Mart, which promised more aggressive discounting on holiday merchandise, means intensified price wars, and lower profit margins, as other merchants slash their prices to compete.

"This is pretty discouraging," said Ken Perkins, president of RetailMetrics, a research company in Swampscott, Mass.

Wal-Mart's confirmation of weak November sales and its announcement that its December same-store sales gain would be no better than 1 percent came as the nation's retailers reported an overall mixed performance for the month. Same-store sales reflect business at stores open at least a year and are a widely followed measure of a company's strength.

In contrast with Target

Wal-Mart's disappointment was a sharp contrast with results from discount rival Target and Macy's operator Federated Department Stores, which reported a robust 8.5 percent same-store sales gain, beating the 4.8 percent estimate. Other retailers had mixed sales; J.C. Penney and Costco Wholesale both fell short of Wall Street projections.

Costco reported a 5 percent gain in same-store sales, below the 5.7 percent estimate. The retailer, which sells gasoline, was hurt by declining prices at the pump.

Nordstrom had a 5.4 percent gain in same-store sales, matching Wall Street expectations.

Penney said same-store sales at its department stores rose 1.4 percent, falling short of the 3.7 percent forecast from Wall Street.

Still struggling

Gap, which is still struggling to find the right fashion formula, suffered an 8 percent drop in same-store sales, worse than the 5.4 percent forecast.

Limited Brands had a 12 percent increase in same-store sales, exceeding the 7.8 percent estimate.

Teen retailers generally did well. Everett-based Zumiez reported Wednesday that same-store sales increased 12.1 percent in November for the four-week period from year-ago levels. Wet Seal had a 5.5 percent same-store gain. American Eagle Outfitters sales rose 14 percent.

The timing of Wal-Mart's news couldn't have been worse, coming just after the start of holiday shopping. While many retailers had a strong Thanksgiving weekend, Wal-Mart said Saturday its November sales would be weaker than expected.

Wal-Mart's 0.1 percent dip in same-store sales for the month is in line with the reduced forecast from analysts surveyed by Thomson Financial. Including a drop in gasoline revenues from its Sam's Club division, which Wal-Mart did not include in its calculation, same store-sales fell 0.3 percent.

Wal-Mart has struggled in recent months with a mix of problems, including the fact that its lower-income customers were hurt by soaring gas prices.

But the company's lackluster sales have persisted even as the cost of gas eased — partly because its attempt to broaden its appeal to higher-income shoppers was poorly executed. It filled its fall clothing racks with too many trendy items like skinny jeans that shoppers didn't want.

Wal-Mart's weakness dragged down the International Council of Shopping Centers-UBS same-store sales tally for November to 2.1 percent, below the original 3 percent growth forecast. Excluding Wal-Mart, the tally rose 4 percent.