Friday headline roundup

Wal-Mart’s biggest problem: Its customers (CNBC, 5/19/2014)

Its prices continue to undercut competitors. It’s offering a slew of new initiatives, from in-store money-transferring services to organic groceries—even comparison shopping for auto insurance. But despite these strategies—and a broad consumer base driven by low prices—Wal-Mart’s U.S. stores are still struggling to gain traction, having posted their fifth-straight quarter of negative same-store sales last week. At the center of the discounter’s domestic woes is its appeal among shoppers who are facing stagnant wage growth and simply can’t afford to spend on discretionary items—or in some cases, food.

 

Why Is Walmart Standing Down in the Minimum Wage Fight? (Demos, 5/19/2014)

And if wages went up for all low-wage workers, that could mean big boost: Walmart’s increased labor costs for hundreds of thousands of workers may be easily offset by more spending by tens of millions of flusher customers. Surely the other factor guiding Walmart on the minimum wage is public relations. Publicly opposing a minimum wage hike would add to the company’s image as being anti-worker. Which is to say that the pressure on Walmart by pro-worker groups is having an effect.

 

Recycling fund from Walmart, P&G and others passes the buck on responsibility (The Guardian, 5/21/2014)

While this may help some cities finance some relatively small projects, this is not – nor should it be seen as – a game-changer. This loan fund will do little to help achieve the stated goal to “provide 100% of US consumers with access to recycling where and when they need it”. So why are they doing it? Every company wants to build their green cred through touting sustainability efforts. For example, at the Walmart expo, P&G also trumpeted their detergent compaction process which puts more detergent into a smaller package as a sustainability initiative. This is what I would call “easy sustainability” because it either costs nothing or saves the companies money. Marketers love easy sustainability because it helps them woo higher-income customers who are willing to pay more for a seemingly greener product. However, many corporations are completely reluctant to do the harder work of “authentic sustainability” – projects or public policy initiatives that may cost money but make significant progress toward solving environmental problems that the companies help create.

 

Why Wal-Mart’s Retail Dominance May Be in Danger (The Motley Fool, 5/18/2014)

There are several forces combining to threaten Wal-Mart’s status as the industry juggernaut. Its customer base is under duress, it’s facing a severe swing in public opinion for its employment practices that is pushing shoppers toward Costco, and its attempts to expand in the emerging markets aren’t working out. If Wal-Mart isn’t careful, it might just lose the top spot in the retailing space sooner rather than later.

What do you think?