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When will competition
authorities finally react? Wal-Mart will double its size, new report says World's largest retailer Wal-Mart can still double its size, a recent research report says. The report has been produced by Retail Forward, a management consulting and market research firm specializing in retailing and consumer products marketing. Wal-Mart has 962,000 workers in the United States and 282,000 in other countries, almost three times more than its largest competitor Carrefour. In the United States, UNI Commerce affiliate UFCW - strongly supported by the whole trade union movement - is engaged in a hard struggle to give Wal-Mart workers a voice through union membership. With special union busting squads being dispatched to markets where organising attempts are being made, the company goes to great lengths to deny its workers this right. If this is not a flagrant violation of international labour standards, one can ask what then is. Growth in food retailing puts pressure on conditions According to the report, food retailing is where Wal-Mart is growing fastest. Retail Forward predicts that the company will have over 2,000 supercenters in the United States by 2006. The Arkansas-based giant will account for one third of the total increase of money spent on food. In many of the large US food retailers, workers are strongly organised with the UFCW. During years of struggle and social dialogue, they have reached wages and collective agreement benefits superior to those of most non-unionised companies. This has also given these retailers a stable and qualified workforce, which has allowed them to perform well in the higly competitive US market. It is clear that Wal-Mart with its ruthless behaviour and lack of social responsibility poses a major threat also to the future of these workers. In addition to food, apparel will be an important area of growth. Wal-Mart is also expected to increase its presence in other areas of retailing than the supercenter-hypermarket trade. This will include smaller supermarkets, convenience stores and 'dollar stores', the report says. While the report points at the importance of Wal-Mart's foreign operations for the company, it indicates that the expansion pace is perhaps not fast enough. Predatory competitor and poor employer At home in the United States, Wal-Mart is a predatory competitor and a poor employer. Hardly a week passes without a new report on Wal-Mart being sued either by competitors, customers or its own workers. With its focus on low prices at any cost, Wal-Mart goes to great lengths to keep trade unions out. Management knows that with the help of a trade union, workers could demand wages and working conditions which are equally good as in competing companies. This would take the edge off Wal-Mart's price competition, which is based on social dumping and ruthless pressure on suppliers and other business associates. One can ask whether competition authorities should allow the further growth of this company. Wal-Mart has shown that it can use its dominant market position and overwhelming financial resources in a way which raises serious questions about fair competition. Particularly small and medium size retailers, which often are family businesses with long traditions, have been the focus of Wal-Mart in its greedy hunt for market shares. Uprising of US communities There is also an unprecedented uprising of communities in the United States, which rightly fear the effects of Wal-Mart establishing itself in their neighbourhood. For many thriving town centres, a Wal-Mart in the region has meant a virtual death sentence. In Japan, Wal-Mart has recently established its first foothold by buying a minority share in supermarket retailer Seiyu. The purchase agreement gives the US retail giant the right to expand its ownership up to two thirds by 2006. A few days ago, it was announced that Seiyu goes over to Wal-Mart's logistics system, which is a clear signal that the transformation to a real Wal-Mart has begun. In the United Kingdom, Wal-Mart has also been careful not to change its fully owned subsidiary Asda too fast. It is still operating under its own name, but the new superstores that have started appearing also carry the Wal-Mart insignia. In Germany, the second European market for Wal-Mart, the company has not had much success. It is now in the process of slimming down, firing people and closing hypermarkets. The Arkansas multinational has also entered on a collision course with its own workers and their powerful trade union ver.di, which has said that it will not leave Wal-Mart alone until the company signs a collective agreement. Expansion through social dumping The economic downturn and the insecurity after September 11th have changed consumption patterns in the United States. Whereas department stores and specialty retailers such as Gap and others have lost sales, discounters with Wal-Mart in the lead have gained. But the price of Wal-Mart's expansion has been that ever more commercial workers are denied collective agreements, fair wages and conditions, health insurance and other benefits which their unionised colleagues enjoy. For commercial workers world-wide, the growth of Wal-Mart is one of the most serious challenges that exist. Because of its size and resources, and its focus on low prices through social dumping, the company will put a downward pressure on labour standards and collective agreement benefits wherever it goes. But not only retail workers will suffer. One can ask what will happen with food safety and with product quality if Wal-Mart-lead price wars make it impossible for suppliers to keep up their standards. Should it not be split up? There are many questions which should now be asked. Is Wal-Mart really not even more dangerous for workers, consumers, competitors and communities than Microsoft was when the US authorities thought that the company should be split up. Why is Wal-Mart now allowed to build up an excessively dominant market position? For workers and trade unions worldwide, its should be completely clear that Wal-Mart represents the very kind of corporation and culture which we neither need nor want. When the behaviour of world's largest retailer - which in fact is also the world's largest company overall - is like that of Wal-Mart, then a strong reaction is needed.
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