THE WAL MART FACTOR:
An Insider's Story

For the most part, I keep my private life out of my commentary. I do speak of my wife, son, and dogs from time to time. Well, I was an analyst for a "green" company that is the world's largest manufacturer of compact fluorescent light bulbs (CFLs). I have mentioned numerous times that I have CFLs in every lamp in my house. I have also mentioned the value of CFLs. Now, you know why I have written about CFLs as much as I have. I was the lead analyst on our Wal Mart account, so I have a first hand working knowledge of what it is like to work as a supplier to Wal Mart. I also have a first hand knowledge of the vision, values, and ideals of the current Wal Mart management team.

First of all, Sam Walton was one of the nation's greatest business leaders. He had a set of core values that sadly the current management team does not embrace. Sam greatly valued his employees, suppliers, and was proud of "Made in America." Wal Mart headquarters is located in Bentonville, AR. Bentonville (as well as Rogers/Springdale) is one of my favorite cities in America. You will not find nicer people anywhere you travel. Sam Walton's vision and success has transformed Northwest Arkansas into a commercial Mecca. The drive from the airport in Fayetville to Bentonville takes you through pastures, and newly developed neighborhoods. Sam Walton Blvd. has scores of hotels, restaurants, shopping, etc. Again, Sam Walton single handedly built Northwest Arkansas into what it is today.

Allow me to flash forward to the current Wal Mart management team. The current Wal Mart team places zero emphasis on respect for suppliers, and could care less about products being produced/manufactured or made in the U.S.A. The Wal Mart management team squeezes suppliers at every corner, and makes life much more difficult than it should be for those who work with them on a daily basis. Not only does the current management team not share in Sam Walton's core business values, but they simply ignore what the consumers want, and they try to push products that they want to sell. For example, less than 15% of Americans are familiar with CFLs. That being said, if you go to any Wal Mart store, you will see that CFLs are at eye level, and that incandescent light bulbs, the traditional light bulbs that you are used to, are on the bottom shelves. This is done intentionally, because Wal Mart has a VERY strong, and irresponsible, global warming/environmental push. Every supplier is forced to fill out a profile for Wal Mart that gives details on the carbon footprint that their products create. Have you seen All Small and Mighty laundry detergent? I think it is a pretty good idea. The bottle is smaller, and it fits better in my laundry room. Wal Mart will not purchase laundry detergent from suppliers unless they are concentrated bottles, to cut down on packaging, shipping, and water use, making the products more environmentally friendly. If you are a company that makes laundry detergent, and you do not want to change your production to fit the demands of Wal Mart, too bad- Wal Mart will not do business with you.

The thing that bothers me the most about Wal Mart is their lack of priorities. Obviously, I do not agree with their belief in the lies of man made global warming. Obviously, I do not like how they treat their suppliers. The thing that bothers me the most is that if they wanted to, Wal Mart could force American companies to produce products in the U.S.A. Wal Mart is a bully. Wal Mart saves the average American family over $2,000/year, by driving prices of consumer goods down. Wal Mart is the single most important retail company in the world. In fact, Wal Mart is pretty much a microcosm of the American consumer. That being said, Wal Mart could single handedly lead the way to bring manufacturing, textile, production, and other industries back to the United States. The current management team has bought into Algore's lies regarding man made "climate change." Wal Mart is the official sponsor for the United States Mayors conference that focuses on global warming. As I stated previously, they force suppliers to develop and implement a "green" initiative. Wal Mart forces U.S. companies to make smaller packaging, use more "economic friendly" delivery systems, and other practices that honestly, Wal Mart has no right to dictate. If they can force American supplies to buy into the global warming hype, hysteria, and lies, then they could clearly force U.S. companies to make their products in the U.S.A. How? It is very simple. They do what they always do. The only thing Wal Mart would need to do is hold a press conference, and contact every supplier, and demand that all products sold in Wal Mart must be produced in the United States, or they could say that a certain percentage (70%) of all products must be made in the U.S.A. Do you know what would happen? All products would be made in the U.S.A. Prices would not go up, because Wal Mart would not pay more for their demands (they never do). They would put the squeeze on American companies, and possibly lower the supplier's profit margin, but we could see a re-birth of domestic production and assembly in America. Wal Mart could single handedly create hundreds of thousands of jobs, if they simply made a commitment to Sam Walton's appreciation for products that are made in America.

For those of you who do not know, and most of you do not know too much about me, but I am an investments rep, and I began my investments career in 2005. For those of you who do not follow politics and finance with the passion and focus that I do, let me tell you about Wal Mart stock prices. Wal Mart stock has basically been flat for the past few years. Wal Mart tried to establish a higher end clothing and apparel line, and they lost their shirts (pun intended). The reason that Wal Mart stock has suffered over the past few years is simple. Wal Mart MUST stop defining their customers and stop telling their customers what they want. Wal Mart must start listening to its customers, and stop forcing the consumer to buy products that they are not interested in. I am a huge fan of the movie Joe Dirt. For those of you who have seen it (and for those who have not), Joe Dirt meets a Native American who sells fireworks at a stand on the side of the road. Joe asks the Indian for various types of firecrackers, but they Indian does not have them in stock, because he personally does not like them. Joe Dirt tells him that it does not matter what he likes, it matters what the consumers want. Wal Mart executives need to watch Joe Dirt. Wal Mart executives need to stop defining their customer. Wal Mart needs to stop pushing products that the consumers clearly do not want. Wal Mart needs to stop bullying companies by forcing them to use certain packaging, transportation, etc. Wal Mart needs to start listening to the consumer, giving the consumer products that they want, and focusing solely on creating value for its share holders.

zm

2/11/2008