business news in context, analysis with attitude

MNB user Christ Hoyt wrote:

I have been following your views on Wal-Mart for several years now and have several suggestions that you may wish to follow to add perspective & balance to your views on this company:

1) Study its P&L. There is no way Wal-Mart can raise wages/improve benefits in line with the emotional recommendations of all of the whiners you are so found of quoting and still deliver either the consumer value or stockholder returns for which Wal-Mart has become so famous & which serves as the backbone of its growth engine.

2) Instead of always quoting 3rd party sources, actually get into some stores & talk to some employees yourself. I make a habit of asking cashiers every time I check out how they like working at Wal-Mart and have yet to find an unhappy employee. The other day, for example, I talked to a cashier who has been with Wal-Mart for 6 months & is just loving it (Wal-Mart Supercenter, Scottsdale, AZ). During this time, her bike was stolen from the parking lot and Wal-Mart replaced it free with a new bike. While this is anecdotal, we think it is much more representative of how Wal-Mart employees view Wal-Mart than all of the self-righteous non-employees quoted so frequently in the mainstream press. If things at Wal-Mart are as bad as the press would have its readers believe, Wal-Mart would have been unionized a long time ago.

3) Pick up a Wal-Mart 10K and study the number of women in upper management executive positions. Truly executive--HQ's- based with real responsibility, not "Assistant Deli Manager" --as Supermarkets like to define their Executive positions. It will become clear to anyone who reads this that women in Wal-Mart who are prepared to walk the walk are rewarded equally as well as men and are not "sexually harassed" along the way. Recently, I was on a panel with one of these women who now makes $440K per year. Wal-Mart biased against women? I think not.

We actually don’t disagree with a lot of what you wrote. We agree that Wal-Mart can’t do what a lot of people suggest and still deliver the same ROI to investors. We do, however think there is a legitimate debate to be had about what “appropriate” benefits are...clearly the cultural/political/economic context for this debate is changing, though we’re not sure for the better. Some people who complain are, to be sure, whining. But some are not...some actually believe in having the discussion because there are larger issues at stake here that have to do with quality of life in America.

As you can imagine, we get a lot of email reacting to our Wal-Mart coverage. Some accuse us of being a Wal-Mart apologist, and others say we’re rabidly anti-Bentonville. We like to think that neither perspective is true...that we’re just trying to encourage debate and discussion and provide the best place on the Internet to have it. We do think that we’re much tougher on the companies that compete against Wal-Mart than on Wal-Mart itself...

For the record, we tend to worry most about the impact of size and ubiquity on the character of American life, and that bigness often translates into homogenization. Not always, but often.

For example, if Wal-Mart refuses to sell certain kinds of CDs, DVDs and books – and it manages to put almost everyone else out of business – will these CDs, DVDs and books be much harder to get? And will this diminish the diversity of American culture?

And in the end, we are far more concerned with these issues than with ROI of any kind.

Just so you know, we do go into Wal-Marts when we can. We find the employees’ reactions to be mixed at best. As for women, probably the most glowing piece we’ve ever written about an executive was several years ago when we wrote about Wal-Mart’s Julie Lyle...but that doesn’t mean the women who filed gender discrimination suits are automatically wrong. It just means they have the right to make their case and the responsibility to prove it.

Ironically, considering this discussion, we had a story last week about how Starbucks has decided not to sell “Devils & Dust,” the new CD just released by Bruce Springsteen, because there is one song on the album that it believes shoppers will find to be offensive.

Starbucks has become a big player in the music business, selling CDs, offering CD burning units in select locations, and even acquiring a music company. There have been reports that Starbucks stores generated one-third of all the sales for Ray Charles’ final album, “Genius Loves Company.”

The song on the new Springsteen album, “Reno,” is about an encounter with a prostitute. The CD cover notes that the song “contains adult imagery.”

Our comment:

We have the CD, as well as have all its songs loaded on our iPod. And while we love Springsteen, we listened to the damn song four times and were only able to figure out what the hell he was singing about when we read the lyrics.

We’ve always said that retailers certainly have the right to sell whatever CDs, DVDs or books they choose to – because making such choices is far preferable to trying to censor the content.

The reality, however, is that in all likelihood, more people are going to listen to “Reno” now because Starbucks has taken a position against the song. It is sort of the natural reaction.

One MNB user wrote:

I read your comments about Springsteen and Starbucks. As a big fan of the Boss, I bought the album and feel the same way as you relative to the song Reno. Unless you read the words to Reno you mostly miss what he's saying.

But I do believe that the company has the right to decide what it will and won't sell through its stores. There will always be markets for music, if Starbucks (or Wal-Mart, or any other store) doesn't feel it fits their values consumers will go to those that do. No harm to Starbucks, no harm to the consumer. It's when the alternate channels dry up or get regulated out that we would have problems.

And another MNB user made a very good point.

I love Bruce Springsteen and I love Starbucks. I bought my Devils & Dust CD at a Barnes & Noble.

I think there was a Starbucks in there!

‘Tis a complicated world…

Finally, we got a number of emails last Friday pointing out a mistake we made in our OffBeat column when we referred to the New York Yankees being beaten up by the Tampa Bay Buccaneers. Among the responses to this statement was this one:

I'm usually the last one to point out a goof in a sports article...I *love* football and basketball, but still don't understand what all the fuss is about baseball. (But I'm out at the diamond most nights, as my kid loves to play....)'s a bit of sports-moment zen to think about the Tampa Bay Buccaneers whupping up on the Yankees. A bit of confusion is understandable, as the Yanks' spring-training field is literally across the street from Raymond James Stadium (home of the Bucs) and the Bucs haven't exactly distinguished themselves with wins the last couple of seasons. As much fun as it is to think about, though, I'm gonna *hope* you meant the Tampa Bay Devil Rays beat up on the Yankees....

Devil Rays, small round white ball....Buccaneers, large oblong brown leather ball.

That’s what we in the business call a Friday morning brain cramp…

We’ll try to do better next time.
KC's View: