Al Norman is one of the best-known thorns in Wal-Mart’s side, having written two books that attempt to expose what he believes are the negative implications for American business and culture of Wal-Mart’s unbridled growth.
In his newest effort, “The Case Against Wal-Mart,” Norman constructs a multi-layered case against allowing the retailer to grow unfettered, suggesting the numerous ways in which Wal-Mart’s “sprawl” is a phenomenon worth examining.
To get a distillation of Norman’s case, MNB conducted an exclusive e-interview with the author.
MNB: Okay, let’s get to the meat of it. Do you think Wal-Mart is evil? Or, at the very least, terribly bad for US culture, business and the economy?
Al Norman: There is no question that Wal-Mart has hollowed out almost every retail segment it has gone into. In each sector--from groceries to gasoline - Wal-Mart succeeds by capturing market share from existing merchants. The most dramatic illustration is in the grocery industry, where Wal-Mart now controls roughly 20% of all grocery sales. During mid 1990s, we lost 9,500 grocery stores, ironically leaving consumers with fewer hands controlling more sales. Wal-Mart represents the end of competition locally, not the beginning. As power consolidates at the top, those low, everyday prices don't have to be so low anymore. Instead of being a shot in the arm to the economy, Wal-Mart has been like a shot to the head. At the macro level, we've seen a dramatic loss of manufacturing base, as retailers like Wal-Mart globalize their sources.
Culturally, Mr. Smiley represents the "blanding down of America", the spread of a corporate culture that destroys regional differences and turns our roadside into miles of windowless concrete walls and parking lots the size of an airport.
MNB: On the one hand, you cite the many ways in which Wal-Mart benefits from “a chain of exploitation,” that it “has no means of production” and “claims plausible deniability for all the wrongs committed in its name.” On the other hand, many would say that Wal-Mart is the very prototype of the successful, modern American business. What makes Wal-Mart different?
Al Norman: The Wal-Mart paradox is this: It has become the darling of Wall Street, and the devil of Main Street. Business executives rank it as American's Most Admired Retailer, yet the company did not even break into Fortune's 100 Best Places to Work. Wal-Mart has been praised for its technological success and its productivity per worker, but it has been reviled for the economic displacement it has caused in community after community. The fundamental schism is that what makes a stockholder happy may make a community miserable. There may be millions of Americans whose sense of community is no bigger than the dimensions of their shopping cart, but there are millions of others in this country who now realize what Wal-Mart represents, and their voice is growing louder and louder.
Wal-Mart can no longer claim is opponents are a "vocal minority." Wal-Mart has proven that it is possible to have enormous financial success that brings with it enormous misery, pain and dislocation. As one Wal-Mart official put it: "At Wal-Mart, we make dust, our competitors make dust." Wal-Mart is the great American Dust Machine, grinding through small town U.S.A.
MNB: If Wal-Mart is so bad to its workers, why do employees keep rejecting unionization? Isn’t it likely that at some point a dysfunctional relationship with employees would come back to haunt Wal-Mart?
Al Norman: The disconnect between Wal-Mart and its own "associates" is obvious. The company is facing so many lawsuits from its own workers, it had to add a lengthy footnote to its annual SEC filing noting all the various legal exposures the company now has. Every year, at least 40% of its workers quit, which comes to 600,000 people taking off their Wal-Mart vests every year. My email has been active for years with the stories of Wal-Mart workers complaining of mistreatment and exploitation. When I say Wal-Mart is a chain of exploitation, one of the biggest links in that chain is its own workforce, and the subsistence wages they earn. One Black commentator recently referred to the "Wal-Mart Plantation", and I think that is a pretty accurate comparison.
MNB: We’ve never been able to figure out why so communities give tax breaks to the wealthiest company on the planet. Exactly how is Wal-Mart able to achieve this? And what can competing retailers do to level the playing field?
Al Norman: I have documented in my book a number of cases of corporate welfare - the use of public tax subsidies to write down Wal-Mart's costs. The company will tell local officials that it can't afford to build a store without financial help--widening roads, extending water and sewer lines, even buying the property--and many local officials, thinking they have touched some kind of retail Elvis, will turn over public funds to the world's richest retailer giant.
Smaller businesses in town that paid their taxes and followed the rules, watch as Wal-Mart sucks down the taxes they paid into the town. Wal-Mart is able to take full advantage of the fact that most local officials have no idea what "added value growth" means. They see a building going up and assume it’s progress. They have no analysis that shows them the economic damage they are creating, no cost/benefit study, and so they throw good money after bad, and end up costing the town more money than they save. All Wal-Mart has to do is put out its corporate hand, and the locals fill it with tax incentives, land, and infrastructure. These give-aways can come to millions of
dollars per project. Smaller retailers have no recourse, because they will not even be offered the same incentives, because the corner jewelry store offers the town no gargantuan promises of jobs or revenues. They are just the backbone of the community. The best thing competitors can do is close the door on tax breaks to retailers, and insist that such incentives be used only for industrial projects, or projects with a clear benefit to the public.
MNB: The notion of abandoned premises is one that we’ve heard a lot about, but we’re not sure what anyone can do about it. What would you suggest?
Al Norman: Wal-Mart now has 371 "dead stores" on the market, over 28 million square feet of empty stores. That makes them the King of Dead Space in this country.
No retailer before or after is likely to have so many wasted stores in the ground. In response, a number of communities are now passing "demolition bond" zoning ordinances that require developers to put funds into escrow to cover the costs of restoring a site to its pre-development state if the store stays vacant from more than 24 months, or other finite period of time. It's unfortunate that communities need to defend themselves that way, but one third of Wal-Mart's dead stores today were on the market in 1999. Towns don't want blighted property on their rolls year after year, so they are asking developers to protect them against such a liability.
In some cases, Wal-Mart has given away its stores, rather than pay the taxes on them. The company also doesn't allow potential new tenants to use their dead stores for discount retailing, pharmacies, or other competitive uses. So the stores just sit there.
MNB will feature Part Two of this interview tomorrow.
In his newest effort, “The Case Against Wal-Mart,” Norman constructs a multi-layered case against allowing the retailer to grow unfettered, suggesting the numerous ways in which Wal-Mart’s “sprawl” is a phenomenon worth examining.
To get a distillation of Norman’s case, MNB conducted an exclusive e-interview with the author.
MNB: Okay, let’s get to the meat of it. Do you think Wal-Mart is evil? Or, at the very least, terribly bad for US culture, business and the economy?
Al Norman: There is no question that Wal-Mart has hollowed out almost every retail segment it has gone into. In each sector--from groceries to gasoline - Wal-Mart succeeds by capturing market share from existing merchants. The most dramatic illustration is in the grocery industry, where Wal-Mart now controls roughly 20% of all grocery sales. During mid 1990s, we lost 9,500 grocery stores, ironically leaving consumers with fewer hands controlling more sales. Wal-Mart represents the end of competition locally, not the beginning. As power consolidates at the top, those low, everyday prices don't have to be so low anymore. Instead of being a shot in the arm to the economy, Wal-Mart has been like a shot to the head. At the macro level, we've seen a dramatic loss of manufacturing base, as retailers like Wal-Mart globalize their sources.
Culturally, Mr. Smiley represents the "blanding down of America", the spread of a corporate culture that destroys regional differences and turns our roadside into miles of windowless concrete walls and parking lots the size of an airport.
MNB: On the one hand, you cite the many ways in which Wal-Mart benefits from “a chain of exploitation,” that it “has no means of production” and “claims plausible deniability for all the wrongs committed in its name.” On the other hand, many would say that Wal-Mart is the very prototype of the successful, modern American business. What makes Wal-Mart different?
Al Norman: The Wal-Mart paradox is this: It has become the darling of Wall Street, and the devil of Main Street. Business executives rank it as American's Most Admired Retailer, yet the company did not even break into Fortune's 100 Best Places to Work. Wal-Mart has been praised for its technological success and its productivity per worker, but it has been reviled for the economic displacement it has caused in community after community. The fundamental schism is that what makes a stockholder happy may make a community miserable. There may be millions of Americans whose sense of community is no bigger than the dimensions of their shopping cart, but there are millions of others in this country who now realize what Wal-Mart represents, and their voice is growing louder and louder.
Wal-Mart can no longer claim is opponents are a "vocal minority." Wal-Mart has proven that it is possible to have enormous financial success that brings with it enormous misery, pain and dislocation. As one Wal-Mart official put it: "At Wal-Mart, we make dust, our competitors make dust." Wal-Mart is the great American Dust Machine, grinding through small town U.S.A.
MNB: If Wal-Mart is so bad to its workers, why do employees keep rejecting unionization? Isn’t it likely that at some point a dysfunctional relationship with employees would come back to haunt Wal-Mart?
Al Norman: The disconnect between Wal-Mart and its own "associates" is obvious. The company is facing so many lawsuits from its own workers, it had to add a lengthy footnote to its annual SEC filing noting all the various legal exposures the company now has. Every year, at least 40% of its workers quit, which comes to 600,000 people taking off their Wal-Mart vests every year. My email has been active for years with the stories of Wal-Mart workers complaining of mistreatment and exploitation. When I say Wal-Mart is a chain of exploitation, one of the biggest links in that chain is its own workforce, and the subsistence wages they earn. One Black commentator recently referred to the "Wal-Mart Plantation", and I think that is a pretty accurate comparison.
MNB: We’ve never been able to figure out why so communities give tax breaks to the wealthiest company on the planet. Exactly how is Wal-Mart able to achieve this? And what can competing retailers do to level the playing field?
Al Norman: I have documented in my book a number of cases of corporate welfare - the use of public tax subsidies to write down Wal-Mart's costs. The company will tell local officials that it can't afford to build a store without financial help--widening roads, extending water and sewer lines, even buying the property--and many local officials, thinking they have touched some kind of retail Elvis, will turn over public funds to the world's richest retailer giant.
Smaller businesses in town that paid their taxes and followed the rules, watch as Wal-Mart sucks down the taxes they paid into the town. Wal-Mart is able to take full advantage of the fact that most local officials have no idea what "added value growth" means. They see a building going up and assume it’s progress. They have no analysis that shows them the economic damage they are creating, no cost/benefit study, and so they throw good money after bad, and end up costing the town more money than they save. All Wal-Mart has to do is put out its corporate hand, and the locals fill it with tax incentives, land, and infrastructure. These give-aways can come to millions of
dollars per project. Smaller retailers have no recourse, because they will not even be offered the same incentives, because the corner jewelry store offers the town no gargantuan promises of jobs or revenues. They are just the backbone of the community. The best thing competitors can do is close the door on tax breaks to retailers, and insist that such incentives be used only for industrial projects, or projects with a clear benefit to the public.
MNB: The notion of abandoned premises is one that we’ve heard a lot about, but we’re not sure what anyone can do about it. What would you suggest?
Al Norman: Wal-Mart now has 371 "dead stores" on the market, over 28 million square feet of empty stores. That makes them the King of Dead Space in this country.
No retailer before or after is likely to have so many wasted stores in the ground. In response, a number of communities are now passing "demolition bond" zoning ordinances that require developers to put funds into escrow to cover the costs of restoring a site to its pre-development state if the store stays vacant from more than 24 months, or other finite period of time. It's unfortunate that communities need to defend themselves that way, but one third of Wal-Mart's dead stores today were on the market in 1999. Towns don't want blighted property on their rolls year after year, so they are asking developers to protect them against such a liability.
In some cases, Wal-Mart has given away its stores, rather than pay the taxes on them. The company also doesn't allow potential new tenants to use their dead stores for discount retailing, pharmacies, or other competitive uses. So the stores just sit there.
MNB will feature Part Two of this interview tomorrow.
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You can order a copy of “The Case Against Wal-Mart” by going to:
http://raphel.com/
