Posts Tagged ‘Coaching’

The Wal-Mart You Don’t Know

May 8, 2013

I was just researching something related to pickles and came across this article…it is from 2003, seems old, right? NOT! This is current and relevant for anyone who thinks they love shopping at Walmart and who thinks Walmart is a good thing for our country. If you shop at Walmart, please read this and re-think where you shop and your part in destroying what IS good for our country, If you don;t frequent Walmart, please read this and learn why you deserve to be applauded.  Thanks for reading!  Tina

The giant retailer’s low prices often come with a high cost. Wal-Mart’s relentless pressure can crush the companies it does business with and force them to send jobs overseas. Are we shopping our way straight to the unemployment line?

By: Charles Fishman


A gallon-sized jar of whole pickles is something to behold. The jar is the size of a small aquarium. The fat green pickles, floating in swampy juice, look reptilian, their shapes exaggerated by the glass. It weighs 12 pounds, too big to carry with one hand. The gallon jar of pickles is a display of abundance and excess; it is entrancing, and also vaguely unsettling. This is the product that Wal-Mart fell in love with: Vlasic’s gallon jar of pickles.

Wal-Mart priced it at $2.97–a year’s supply of pickles for less than $3! “They were using it as a ‘statement’ item,” says Pat Hunn, who calls himself the “mad scientist” of Vlasic’s gallon jar. “Wal-Mart was putting it before consumers, saying, This represents what Wal-Mart’s about. You can buy a stinkin’ gallon of pickles for $2.97. And it’s the nation’s number-one brand.”

Therein lies the basic conundrum of doing business with the world’s largest retailer. By selling a gallon of kosher dills for less than most grocers sell a quart, Wal-Mart may have provided a ser-vice for its customers. But what did it do for Vlasic? The pickle maker had spent decades convincing customers that they should pay a premium for its brand. Now Wal-Mart was practically giving them away. And the fevered buying spree that resulted distorted every aspect of Vlasic’s operations, from farm field to factory to financial statement.

Indeed, as Vlasic discovered, the real story of Wal-Mart, the story that never gets told, is the story of the pressure the biggest retailer relentlessly applies to its suppliers in the name of bringing us “every day low prices.” It’s the story of what that pressure does to the companies Wal-Mart does business with, to U.S. manufacturing, and to the economy as a whole. That story can be found floating in a gallon jar of pickles at Wal-Mart.

Wal-Mart is not just the world’s largest retailer. It’s the world’s largest company–bigger than ExxonMobil, General Motors, and General Electric. The scale can be hard to absorb. Wal-Mart sold $244.5 billion worth of goods last year. It sells in three months what

number-two retailer Home Depot sells in a year. And in its own category of general merchandise and groceries, Wal-Mart no longer has any real rivals. It does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined. “Clearly,” says Edward Fox, head of Southern Methodist University’s J.C. Penney Center for Retailing Excellence, “Wal-Mart is more powerful than any retailer has ever been.” It is, in fact, so big and so furtively powerful as to have become an entirely different order of corporate being.

Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that don’t change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.

Of course, U.S. companies have been moving jobs offshore for decades, long before Wal-Mart was a retailing power. But there is no question that the chain is helping accelerate the loss of American jobs to low-wage countries such as China. Wal-Mart, which in the late 1980s and early 1990s trumpeted its claim to “Buy American,” has doubled its imports from China in the past five years alone, buying some $12 billion in merchandise in 2002. That’s nearly 10% of all Chinese exports to the United States.

One way to think of Wal-Mart is as a vast pipeline that gives non-U.S. companies direct access to the American market. “One of the things that limits or slows the growth of imports is the cost of establishing connections and networks,” says Paul Krugman, the Princeton University economist. “Wal-Mart is so big and so centralized that it can all at once hook Chinese and other suppliers into its digital system. So–wham!–you have a large switch to overseas sourcing in a period quicker than under the old rules of retailing.”

Steve Dobbins has been bearing the brunt of that switch. He’s president and CEO of Carolina Mills, a 75-year-old North Carolina company that supplies thread, yarn, and textile finishing to apparel makers–half of which supply Wal-Mart. Carolina Mills grew steadily until 2000. But in the past three years, as its customers have gone either overseas or out of business, it has shrunk from 17 factories to 7, and from 2,600 employees to 1,200. Dobbins’s customers have begun to face imported clothing sold so cheaply to Wal-Mart that they could not compete even if they paid their workers nothing.

“People ask, ‘How can it be bad for things to come into the U.S. cheaply? How can it be bad to have a bargain at Wal-Mart?’ Sure, it’s held inflation down, and it’s great to have bargains,” says Dobbins. “But you can’t buy anything if you’re not employed. We are shopping ourselves out of jobs.”

The gallon jar of pickles at Wal-Mart became a devastating success, giving Vlasic strong sales and growth numbers–but slashing its profits by millions of dollars.

There is no question that Wal-Mart’s relentless drive to squeeze out costs has benefited consumers. The giant retailer is at least partly responsible for the low rate of U.S. inflation, and a McKinsey & Co. study concluded that about 12% of the economy’s productivity gains in the second half of the 1990s could be traced to Wal-Mart alone.

There is also no question that doing business with Wal-Mart can give a supplier a fast, heady jolt of sales and market share. But that fix can come with long-term consequences for the health of a brand and a business. Vlasic, for example, wasn’t looking to build its brand on a gallon of whole pickles. Pickle companies make money on “the cut,” slicing cucumbers into spears and hamburger chips. “Cucumbers in the jar, you don’t make a whole lot of money there,” says Steve Young, a former vice president of grocery marketing for pickles at Vlasic, who has since left the company.

At some point in the late 1990s, a Wal-Mart buyer saw Vlasic’s gallon jar and started talking to Pat Hunn about it. Hunn, who has also since left Vlasic, was then head of Vlasic’s Wal-Mart sales team, based in Dallas. The gallon intrigued the buyer. In sales tests, priced somewhere over $3, “the gallon sold like crazy,” says Hunn, “surprising us all.” The Wal-Mart buyer had a brainstorm: What would happen to the gallon if they offered it nationwide and got it below $3? Hunn was skeptical, but his job was to look for ways to sell pickles at Wal-Mart. Why not?

And so Vlasic’s gallon jar of pickles went into every Wal-Mart, some 3,000 stores, at $2.97, a price so low that Vlasic and Wal-Mart were making only a penny or two on a jar, if that. It was showcased on big pallets near the front of stores. It was an abundance of abundance. “It was selling 80 jars a week, on average, in every store,” says Young. Doesn’t sound like much, until you do the math: That’s 240,000 gallons of pickles, just in gallon jars, just at Wal-Mart, every week. Whole fields of cucumbers were heading out the door.

For Vlasic, the gallon jar of pickles became what might be called a devastating success. “Quickly, it started cannibalizing our non-Wal-Mart business,” says Young. “We saw consumers who used to buy the spears and the chips in supermarkets buying the Wal-Mart gallons. They’d eat a quarter of a jar and throw the thing away when they got moldy. A family can’t eat them fast enough.”

The gallon jar reshaped Vlasic’s pickle business: It chewed up the profit margin of the business with Wal-Mart, and of pickles generally. Procurement had to scramble to find enough pickles to fill the gallons, but the volume gave Vlasic strong sales numbers, strong growth numbers, and a powerful place in the world of pickles at Wal-Mart. Which accounted for 30% of Vlasic’s business. But the company’s profits from pickles had shriveled 25% or more, Young says–millions of dollars.

The gallon was hoisting Vlasic and hurting it at the same time.

Young remembers begging Wal-Mart for relief. “They said, ‘No way,’ ” says Young. “We said we’ll increase the price”–even $3.49 would have helped tremendously–“and they said, ‘If you do that, all the other products of yours we buy, we’ll stop buying.’ It was a clear threat.” Hunn recalls things a little differently, if just as ominously: “They said, ‘We want the $2.97 gallon of pickles. If you don’t do it, we’ll see if someone else might.’ I knew our competitors were saying to Wal-Mart, ‘We’ll do the $2.97 gallons if you give us your other business.’ ” Wal-Mart’s business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.

Finally, Wal-Mart let Vlasic up for air. “The Wal-Mart guy’s response was classic,” Young recalls. “He said, ‘Well, we’ve done to pickles what we did to orange juice. We’ve killed it. We can back off.’ ” Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy–although the gallon jar of pickles, everyone agrees, wasn’t a critical factor.

By now, it is accepted wisdom that Wal-Mart makes the companies it does business with more efficient and focused, leaner and faster. Wal-Mart itself is known for continuous improvement in its ability to handle, move, and track merchandise. It expects the same of its suppliers. But the ability to operate at peak efficiency only gets you in the door at Wal-Mart. Then the real demands start. The public image Wal-Mart projects may be as cheery as its yellow smiley-face mascot, but there is nothing genial about the process by which Wal-Mart gets its suppliers to provide tires and contact lenses, guns and underarm deodorant at every day low prices. Wal-Mart is legendary for forcing its suppliers to redesign everything from their packaging to their computer systems. It is also legendary for quite straightforwardly telling them what it will pay for their goods.

“We are one of Wal-Mart’s biggest suppliers, and they are our biggest customer, by far. We have a great relationship. That’s all I can say. Are we done now?”

John Fitzgerald, a former vice president of Nabisco, remembers Wal-Mart’s reaction to his company’s plan to offer a 25-cent newspaper coupon for a large bag of Lifesavers in advance of Halloween. Wal-Mart told Nabisco to add up what it would spend on the promotion–for the newspaper ads, the coupons, and handling–and then just take that amount off the price instead. “That isn’t necessarily good for the manufacturer,” Fitzgerald says. “They need things that draw attention.”

It also is not unheard of for Wal-Mart to demand to examine the private financial records of a supplier, and to insist that its margins are too high and must be cut. And the smaller the supplier, one academic study shows, the greater the likelihood that it will be forced into damaging concessions. Melissa Berryhill, a Wal-Mart spokeswoman, disagrees: “The fact is Wal-Mart, perhaps like no other retailer, seeks to establish collaborative and mutually beneficial relationships with our suppliers.”

For many suppliers, though, the only thing worse than doing business with Wal-Mart may be not doing business with Wal-Mart. Last year, 7.5 cents of every dollar spent in any store in the United States (other than auto-parts stores) went to the retailer. That means a contract with Wal-Mart can be critical even for the largest consumer-goods companies. Dial Corp., for example, does 28% of its business with Wal-Mart. If Dial lost that one account, it would have to double its sales to its next nine customers just to stay even. “Wal-Mart is the essential retailer, in a way no other retailer is,” says Gib Carey, a partner at Bain & Co., who is leading a yearlong study of how to do business with Wal-Mart. “Our clients cannot grow without finding a way to be successful with Wal-Mart.”

Many companies and their executives frankly admit that supplying Wal-Mart is like getting into the company version of basic training with an implacable Army drill sergeant. The process may be unpleasant. But there can be some positive results.

“Everyone from the forklift driver on up to me, the CEO, knew we had to deliver [to Wal-Mart] on time. Not 10 minutes late. And not 45 minutes early, either,” says Robin Prever, who was CEO of Saratoga Beverage Group from 1992 to 2000, and made private-label water sold at Wal-Mart. “The message came through clearly: You have this 30-second delivery window. Either you’re there, or you’re out. With a customer like that, it changes your organization. For the better. It wakes everybody up. And all our customers benefited. We changed our whole approach to doing business.”

But you won’t hear evenhanded stories like that from Wal-Mart, or from its current suppliers. Despite being a publicly traded company, Wal-Mart is intensely private. It declined to talk in detail about its relationships with its suppliers for this story. More strikingly, dozens of companies contacted declined to talk about even the basics of their business with Wal-Mart.

Here, for example, is an executive at Dial: “We are one of Wal-Mart’s biggest suppliers, and they are our biggest customer by far. We have a great relationship. That’s all I can say. Are we done now?” Goaded a bit, the executive responds with an almost hysterical edge: “Are you meshuga? Why in the world would we talk about Wal-Mart? Ask me about anything else, we’ll talk. But not Wal-Mart.”

No one wants to end up in what is known among Wal-Mart vendors as the “penalty box”–punished, or even excluded from the store shelves, for saying something that makes Wal-Mart unhappy. (The penalty box is normally reserved for vendors who don’t meet performance benchmarks, not for those who talk to the press.)

“You won’t hear anything negative from most people,” says Paul Kelly, founder of Silvermine Consulting Group, a company that helps businesses work more effectively with retailers. “It would be committing suicide. If Wal-Mart takes something the wrong way, it’s like Saddam Hussein. You just don’t want to piss them off.”

As a result, this story was reported in an unusual way: by speaking with dozens of people who have spent years selling to Wal-Mart, or consulting to companies that sell to Wal-Mart, but who no longer work for companies that do business with Wal-Mart. Unless otherwise noted, the companies involved in the events they described refused even to confirm or deny the basics of the events.

To a person, all those interviewed credit Wal-Mart with a fundamental integrity in its dealings that’s unusual in the world of consumer goods, retailing, and groceries. Wal-Mart does not cheat suppliers, it keeps its word, it pays its bills briskly. “They are tough people but very honest; they treat you honestly,” says Peter Campanella, who ran the business that sold Corning kitchenware products, both at Corning and then at World Kitchen. “It was a joke to do business with most of their competitors. A fiasco.”

But Wal-Mart also clearly does not hesitate to use its power, magnifying the Darwinian forces already at work in modern global capitalism.

Caught in the Wal-Mart squeeze, Huffy didn’t just relinquish profits to keep its commitment to the retailer. It handed those profits to the competition.

What does the squeeze look like at Wal-Mart? It is usually thoroughly rational, sometimes devastatingly so.

John Mariotti is a veteran of the consumer-products world–he spent nine years as president of Huffy Bicycle Co., a division of Huffy Corp., and is now chairman of World Kitchen, the company that sells Oxo, Revere, Corning, and Ekco brand housewares.

He could not be clearer on his opinion about Wal-Mart: It’s a great company, and a great company to do business with. “Wal-Mart has done more good for America by several thousand orders of magnitude than they’ve done bad,” Mariotti says. “They have raised the bar, and raised the bar for everybody.”

Mariotti describes one episode from Huffy’s relationship with Wal-Mart. It’s a tale he tells to illustrate an admiring point he makes about the retailer. “They demand you do what you say you are going to do.” But it’s also a classic example of the damned-if-you-do, damned-if-you-don’t Wal-Mart squeeze. When Mariotti was at Huffy throughout the 1980s, the company sold a range of bikes to Wal-Mart, 20 or so models, in a spread of prices and profitability. It was a leading manufacturer of bikes in the United States, in places like Ponca City, Oklahoma; Celina, Ohio; and Farmington, Missouri.

One year, Huffy had committed to supply Wal-Mart with an entry-level, thin-margin bike–as many as Wal-Mart needed. Sales of the low-end bike took off. “I woke up May 1”–the heart of the bike production cycle for the summer–“and I needed 900,000 bikes,” he says. “My factories could only run 450,000.” As it happened, that same year, Huffy’s fancier, more-profitable bikes were doing well, too, at Wal-Mart and other places. Huffy found itself in a bind.

With other retailers, perhaps, Mariotti might have sat down, renegotiated, tried to talk his way out of the corner. Not with Wal-Mart. “I made the deal up front with them,” he says. “I knew how high was up. I was duty-bound to supply my customer.” So he did something extraordinary. To free up production in order to make Wal-Mart’s cheap bikes, he gave the designs for four of his higher-end, higher-margin products to rival manufacturers. “I conceded business to my competitors, because I just ran out of capacity,” he says. Huffy didn’t just relinquish profits to keep Wal-Mart happy–it handed those profits to its competition. “Wal-Mart didn’t tell me what to do,” Mariotti says. “They didn’t have to.” The retailer, he adds, “is tough as nails. But they give you a chance to compete. If you can’t compete, that’s your problem.”

In the years since Mariotti left Huffy, the bike maker’s relationship with Wal-Mart has been vital (though Huffy Corp. has lost money in three out of the last five years). It is the number-three seller of bikes in the United States. And Wal-Mart is the number-one retailer of bikes. But here’s one last statistic about bicycles: Roughly 98% are now imported from places such as China, Mexico, and Taiwan. Huffy made its last bike in the United States in 1999.

As Mariotti says, Wal-Mart is tough as nails. But not every supplier agrees that the toughness is always accompanied by fairness. The Lovable Company was founded in 1926 by the grandfather of Frank Garson II, who was Lovable’s last president. It did business with Wal-Mart, Garson says, from the earliest days of founder Sam Walton’s first store in Bentonville, Arkansas. Lovable made bras and lingerie, supplying retailers that also included Sears and Victoria’s Secret. At one point, it was the sixth-largest maker of intimate apparel in the United States, with 700 employees in this country and another 2,000 at eight factories in Central America.

Eventually Wal-Mart became Lovable’s biggest customer. “Wal-Mart has a big pencil,” says Garson. “They have such awesome purchasing power that they write their own ticket. If they don’t like your prices, they’ll go vertical and do it themselves–or they’ll find someone that will meet their terms.”

In the summer of 1995, Garson asserts, Wal-Mart did just that. “They had awarded us a contract, and in their wisdom, they changed the terms so dramatically that they really reneged.” Garson, still worried about litigation, won’t provide details. “But when you lose a customer that size, they are irreplaceable.”

Lovable was already feeling intense cost pressure. Less than three years after Wal-Mart pulled its business, in its 72nd year, Lovable closed. “They leave a lot to be desired in the way they treat people,” says Garson. “Their actions to pulverize people are unnecessary. Wal-Mart chewed us up and spit us out.”

Believe it or not, American business has been through this before. The Great Atlantic & Pacific Tea Co., the grocery-store chain, stood astride the U.S. market in the 1920s and 1930s with a dominance that has likely never been duplicated. At its peak, A&P had five times the number of stores Wal-Mart has now (although much smaller ones), and at one point, it owned 80% of the supermarket business. Some of the antipredatory-pricing laws in use today were inspired by A&P’s attempts to muscle its suppliers.

There is very little academic and statistical study of Wal-Mart’s impact on the health of its suppliers and virtually nothing in the last decade, when Wal-Mart’s size has increased by a factor of five. This while the retail industry has become much more concentrated. In large part, that’s because it’s nearly impossible to get meaningful data that would allow researchers to track the influence of Wal-Mart’s business on companies over time. You’d need cooperation from the vendor companies or Wal-Mart or both–and neither Wal-Mart nor its suppliers are interested in sharing such intimate detail.

Bain & Co., the global management consulting firm, is in the midst of a project that asks, How does a company have a healthy relationship with Wal-Mart? How do you avoid being sucked into the vortex? How do you maintain some standing, some leverage of your own?

This July, in a mating that had the relieved air of lovers who had too long resisted embracing, Levi Strauss rolled blue jeans into every Wal-Mart in the United States.

Bain’s first insights are obvious, if not easy. “Year after year,” Carey, a partner at Bain & Co., says, “for any product that is the same as what you sold them last year, Wal-Mart will say, ‘Here’s the price you gave me last year. Here’s what I can get a competitor’s product for. Here’s what I can get a private-label version for. I want to see a better value that I can bring to my shopper this year. Or else I’m going to use that shelf space differently.’ ”

Carey has a friend in the umbrella business who learned that. One year, because of costs, he went to Wal-Mart and asked for a 5% price increase. “Wal-Mart said, ‘We were expecting a 5% decrease. We’re off by 10%. Go back and sharpen your pencil.’ ” The umbrella man scrimped and came back with a 2% increase. “They said, ‘We’ll go with a Chinese manufacturer’–and he was out entirely.”

The Wal-Mart squeeze means vendors have to be as relentless and as microscopic as Wal-Mart is at managing their own costs. They need, in fact, to turn themselves into shadow versions of Wal-Mart itself. “Wal-Mart won’t necessarily say you have to reconfigure your distribution system,” says Carey. “But companies recognize they are not going to maintain margins with growth in their Wal-Mart business without doing it.”

The way to avoid being trapped in a spiral of growing business and shrinking profits, says Carey, is to innovate. “You need to bring Wal-Mart new products–products consumers need. Because with those, Wal-Mart doesn’t have benchmarks to drive you down in price. They don’t have historical data, you don’t have competitors, they haven’t bid the products out to private-label makers. That’s how you can have higher prices and higher margins.”

Reasonable advice, but not universally useful. There has been an explosion of “innovation” in toothbrushes and toothpastes in the past five years, for instance; but a pickle is a pickle is a pickle.

Bain’s other critical discovery is that consumers are often more loyal to product companies than to Wal-Mart. With strongly branded items people develop a preference for–things like toothpaste or laundry detergent–Wal-Mart rarely forces shoppers to switch to a second choice. It would simply punish itself by seeing sales fall, and it won’t put up with that for long.

But as Wal-Mart has grown in market reach and clout, even manufacturers known for nurturing premium brands may find themselves overpowered. This July, in a mating that had the relieved air of lovers who had too long resisted embracing, Levi Strauss rolled blue jeans into every Wal-Mart doorway in the United States: 2,864 stores. Wal-Mart, seeking to expand its clothing business with more fashionable brands, promoted the clothes on its in-store TV network and with banners slipped over the security-tag detectors at exit doors.

Levi’s launch into Wal-Mart came the same summer the clothes maker celebrated its 150th birthday. For a century and a half, one of the most recognizable names in American commerce had survived without Wal-Mart. But in October 2002, when Levi Strauss and Wal-Mart announced their engagement, Levi was shrinking rapidly. The pressure on Levi goes back 25 years–well before Wal-Mart was an influence. Between 1981 and 1990, Levi closed 58 U.S. manufacturing plants, sending 25% of its sewing overseas.

Sales for Levi peaked in 1996 at $7.1 billion. By last year, they had spiraled down six years in a row, to $4.1 billion; through the first six months of 2003, sales dropped another 3%. This one account–selling jeans to Wal-Mart–could almost instantly revive Levi.

Last year, Wal-Mart sold more clothing than any other retailer in the country. It also sold more pairs of jeans than any other store. Wal-Mart’s own inexpensive house brand of jeans, Faded Glory, is estimated to do $3 billion in sales a year, a house brand nearly the size of Levi Strauss. Perhaps most revealing in terms of Levi’s strategic blunders: In 2002, half the jeans sold in the United States cost less than $20 a pair. That same year, Levi didn’t offer jeans for less than $30.

For much of the last decade, Levi couldn’t have qualified to sell to Wal-Mart. Its computer systems were antiquated, and it was notorious for delivering clothes late to retailers. Levi admitted its on-time delivery rate was 65%. When it announced the deal with Wal-Mart last year, one fashion-industry analyst bluntly predicted Levi would simply fail to deliver the jeans.

But Levi Strauss has taken to the Wal-Mart Way with the intensity of a near-death religious conversion–and Levi’s executives were happy to talk about their experience getting ready to sell at Wal-Mart. One hundred people at Levi’s headquarters are devoted to the new business; another 12 have set up in an office in Bentonville, near Wal-Mart’s headquarters, where the company has hired a respected veteran Wal-Mart sales account manager.

Getting ready for Wal-Mart has been like putting Levi on the Atkins diet. It has helped everything–customer focus, inventory management, speed to market. It has even helped other retailers that buy Levis, because Wal-Mart has forced the company to replenish stores within two days instead of Levi’s previous five-day cycle.

And so, Wal-Mart might rescue Levi Strauss. Except for one thing.

Levi didn’t actually have any clothes it could sell at Wal-Mart. Everything was too expensive. It had to develop a fresh line for mass retailers: the Levi Strauss Signature brand, featuring Levi Strauss’s name on the back of the jeans.

Two months after the launch, Levi basked in the honeymoon glow. Overall sales, after falling for the first six months of 2003, rose 6% in the third quarter; profits in the summer quarter nearly doubled. All, Levi’s CEO said, because of Signature.

“They are all very rational people. And they had a good point. Everyone was willing to pay more for a Master Lock. But how much more can they justify?”

But the low-end business isn’t a business Levi is known for, or one it had been particularly interested in. It’s also a business in which Levi will find itself competing with lean, experienced players such as VF and Faded Glory. Levi’s makeover might so improve its performance with its non-Wal-Mart suppliers that its established business will thrive, too. It is just as likely that any gains will be offset by the competitive pressures already dissolving Levi’s premium brands, and by the cannibalization of its own sales. “It’s hard to see how this relationship will boost Levi’s higher-end business,” says Paul Farris, a professor at the University of Virginia’s Darden Graduate School of Business Administration. “It’s easy to see how this will hurt the higher-end business.”

If Levi clothing is a runaway hit at Wal-Mart, that may indeed rescue Levi as a business. But what will have been rescued? The Signature line–it includes clothing for girls, boys, men, and women–is an odd departure for a company whose brand has long been an American icon. Some of the jeans have the look, the fingertip feel, of pricier Levis. But much of the clothing has the look and feel it must have, given its price (around $23 for adult pants): cheap. Cheap and disappointing to find labeled with Levi Strauss’s name. And just five days before the cheery profit news, Levi had another announcement: It is closing its last two U.S. factories, both in San Antonio, and laying off more than 2,500 workers, or 21% of its workforce. A company that 22 years ago had 60 clothing plants in the United States–and that was known as one of the most socially reponsible corporations on the planet–will, by 2004, not make any clothes at all. It will just import them.

In the end, of course, it is we as shoppers who have the power, and who have given that power to Wal-Mart. Part of Wal-Mart’s dominance, part of its insight, and part of its arrogance, is that it presumes to speak for American shoppers.

If Wal-Mart doesn’t like the pricing on something, says Andrew Whitman, who helped service Wal-Mart for years when he worked at General Foods and Kraft, they simply say, “At that price we no longer think it’s a good value to our shopper. Therefore, we don’t think we should carry it.”

Wal-Mart has also lulled shoppers into ignoring the difference between the price of something and the cost. Its unending focus on price underscores something that Americans are only starting to realize about globalization: Ever-cheaper prices have consequences. Says Steve Dobbins, president of thread maker Carolina Mills: “We want clean air, clear water, good living conditions, the best health care in the world–yet we aren’t willing to pay for anything manufactured under those restrictions.”

Randall Larrimore, a former CEO of MasterBrand Industries, the parent company of Master Lock, understands that contradiction too well. For years, he says, as manufacturing costs in the United States rose, Master Lock was able to pass them along. But at some point in the 1990s, Asian manufacturers started producing locks for much less. “When the difference is $1, retailers like Wal-Mart would prefer to have the brand-name padlock or faucet or hammer,” Larrimore says. “But as the spread becomes greater, when our padlock was $9, and the import was $6, then they can offer the consumer a real discount by carrying two lines. Ultimately, they may only carry one line.”

In January 1997, Master Lock announced that, after 75 years making locks in Milwaukee, it would begin importing more products from Asia. Not too long after, Master Lock opened a factory of its own in Nogales, Mexico. Today, it makes just 10% to 15% of its locks in Milwaukee–its 300 employees there mostly make parts that are sent to Nogales, where there are now 800 factory workers.

Larrimore did the first manufacturing layoffs at Master Lock. He negotiated with Master Lock’s unions himself. He went to Bentonville. “I loved dealing with Wal-Mart, with Home Depot,” he says. “They are all very rational people. There wasn’t a whole lot of room for negotiation. And they had a good point. Everyone was willing to pay more for a Master Lock. But how much more can they justify? If they can buy a lock that has arguably similar qual-ity, at a cheaper price, well, they can get their consumers a deal.”

It’s Wal-Mart in the role of Adam Smith’s invisible hand. And the Milwaukee employees of Master Lock who shopped at Wal-Mart to save money helped that hand shove their own jobs right to Nogales. Not consciously, not directly, but inevitably. “Do we as consumers appreciate what we’re doing?” Larrimore asks. “I don’t think so. But even if we do, I think we say, Here’s a Master Lock for $9, here’s another lock for $6–let the other guy pay $9.”

Charles Fishman is a senior writer at Fast Company. Andrew Moesel provided research assistance for this story.

A version of this article appeared in the December 2003 issue of Fast Company magazine.

How To Protect Your Social Security Number

March 31, 2013

I read this today on yahoo…hope it is helpful to you

5 Places Where You Should Never Give Your Social Security Number

By Adam Levin | Credit.com – Fri, Mar 29, 2013 3:29 PM EDT

Every time you go to a new doctor or dentist and they give you a clipboard brimming with documents to fill out and sign, notice how they always ask for your Social Security number? Do you dutifully give it up? Did you ever wonder if they really need it?

I once asked a doctor why he wanted it. His response: “I don’t really know. I guess it’s because we’ve always asked for it.” (In actuality, most doctors ask in case your insurance doesn’t pay the entire invoice and/or to fill out a death certificate if you die. Offer a next of kin who knows the number instead, and your phone number for billing issues.)

Almost every day somebody asks for your Social Security Number and, like the Grand Marshal of a parade throwing rose petals or candy to the crowd, you probably give it up without giving it a second thought — because that’s what you’ve always done.

So, the next time someone asks you for your Social Security number, reflect on this: In December, the Army announced that hackers stole the Social Security numbers of 36,000 visitors to Fort Monmouth in New Jersey, including intelligence officers. Cyber activists took control of the CIA’s website. The private information, including some Social Security numbers, of celebrities and political leaders including FBI Director Robert Mueller and Secretary of State Hillary Clinton were exposed.

The sensitive data of First Lady Michelle Obama, Vice President Joe Biden and Attorney General Eric Holder, recently were posted on a website for the world to see.

Hackers even listened in on a phone call in which the FBI and Scotland Yard were discussing the criminal investigation against those very same hackers!

And, these incidents are only the crumbs on top of the coffee cake when you consider that hackers and thieves have improperly accessed more than 600 million consumer files since 2004.

Monty Python had it right

The moral to these horror stories is that if your Social Security number is stored on any computer anywhere, hackers will find a way to access it, or a compromised or disgruntled employee may well walk out the door with it. If your doctor, gym, or child’s grade school claims otherwise, that their security systems can protect your private data better than the CIA, FBI and Scotland Yard, to quote Monty Python: “Run away!”

Your identity is your biggest asset, and your Social Security number is the key to your personal kingdom. With it an identity thief can wreak havoc, hijacking your old credit accounts, establishing new ones, buying cars and houses, committing crimes, even obtaining medical products and services while pretending to be you, endangering not just your credit and your reputation, but also your life.

Consumers whose Social Security numbers are exposed in a data breach are five times more likely to become fraud victims than those who aren’t, according to the latest identity fraud report by Javelin Strategy & Research.

Just say no

For better or worse, you are the gatekeeper. The person most responsible for shielding your Social Security Number is you. Therefore, your mission is to limit, as best you can, the universe of those who gain access to it.

Here’s a short list of companies and organizations that have absolutely no business requesting your Social Security number:

1. Anyone who calls or sends you an official-looking email, who texts you a link to any site or designates a number to call where you are asked to confirm your SSN. If they call, check the credit or debit card that is the subject of the communication, call the customer service number listed on the back, and ask for the security department. If they email or text, do the same, or go directly to the institution’s website (provided you know who they are). Make sure you type the correct URL, and make sure that the page where you are asked to enter your information is secure. Only provide personal information if you’re the one who controls the interaction.

2. Public schools: Your utility bill confirms your address. Your email and phone number give them channels to contact you in an emergency. Asking for your Social Security number is overkill.

3. Little League, summer camp and the like: For the same reasons as school, a Social Security number should never be required by these groups. If they ask for your child’s birth certificate, show it to them, don’t leave it with them unless they can prove they will protect it. And even then, can you really believe them?  If you use credit to pay for the activity, the organization may need your Social Security number. If you pay for it upfront or with a direct debit to your bank account or credit card, they don’t. Period.

4. Supermarkets: A frequent shopper card is neither a loan, nor a bank account. It’s merely a tool grocery stores use to track your purchases, primarily for marketing purposes. Regardless, many supermarket chains request customers’ Social Security numbers on their application forms. Refuse.

5. Anybody who approaches you on the street, whether it’s a cell phone company salesman offering a free T-shirt or someone running a voter registration campaign: Never, ever give your SSN. If you want an ill-fitting T-shirt festooned with corporate logos, buy one. If you want to register to vote, go to your county board of elections in person.

This is the short list. There are plenty of other organizations that should never get your Social Security number, and if you know one that I’ve left out, please leave it in the comments.

Don’t just hand it over

Once you realize how often you are asked for your Social Security number, you may be surprised. It happens literally all the time. So, the next time someone does, as they inevitably will, here’s how to handle it:

1. Take a minute and think. Maybe they ask for SSNs blindly, because everyone else does, or because that’s how they’ve always done it. Maybe they actually need it. See if their reason sounds legitimate.  (Update: For example, Credit.com’s Credit Report Card does ask for your SSN in order to generate your credit score and credit report summary — an industry standard – but the information is fully encrypted with a bank level authentication process.)

2. Negotiate. There are many different ways to identify you without a Social Security number, including your driver’s license or account number. Fight to use those instead.

3. If you must share your Social Security number, do so, but make sure the people taking it down have strong security measures in place to protect it. That said, you only have their assurance and frankly, in light of the mistakes people make and the sophistication level of hackers, who really knows if they can protect it?

Overcoming the addiction

If all this sounds like a giant pain in the neck, you’re right. It is. In the midst of our busy lives, we shouldn’t be the only ones concerned with protecting our most valuable identity asset, but it is what it is. Until somebody creates a Silver Bullet for identity theft, we are forced to take matters into our own hands.

Don’t be passive; ask the companies and nonprofit groups with which you do business how they plan to protect you. Do they password protect and encrypt all the personal information they collect? Do they have strict controls on who has access to computers containing your Social Security number, and do they keep this sensitive data off laptops, tablets and hard drives that are easy to steal or lose?

Like the doctor I met, many companies collect Social Security numbers they don’t need because they’re operating on autopilot. They’ve always done it, and their colleagues at other companies do it, so the practice continues and spreads on the strength of simple, dumb inertia. I believe that we are smarter than that. By demanding that companies do a better job protecting our personal information, and refusing to hand out our Social Security numbers like candy at a parade, we can force them to get smarter, too. And if they don’t think we’re serious about this and the government doesn’t finally force them off their Social Security number addiction, it is highly likely that the ultimate regulator of the American economic system, class action attorneys, will be knocking on their doors.

Discontinued? Buy in Bulk!

January 20, 2011

Stock up! Buy ahead!  Everything gets discontinued!

I am sick of it!  Sick, sick, sick…it started out for me years ago with bras..I’d spend all this time finding the right bra, the perfect bra, buy a few and I’d go home very content.  Then a year would go by and I would want to buy new bras, I’d return to the store to buy them and the bra I had been so happy with was no longer available…oh, come on…please…it is just all too much…the bra is gone, whisked away, no longer on the face of the earth. Did the manufacturer consult you or me before making such a huge change in our lives? No…The company simply doesn’t care about how hard it is to find the perfect bra- the one that is comfy, doesn’t ride up, doesn’t bind, makes your “girls” look perky or however you want them to look.

That’s just the beginning of it..

We are trying to go “green” and organic at our house. Now you know how difficult it is even decide to attempt such huge changes, to research products, to try a new product (or new to you), see if you like it, commit to it (because it’s good for you and the planet).  Oh, you get so excited about it – the fact that you are using THIS ONE PRODUCT and LIKE IT and IT IS GREEN!!!  And of course in the back of your mind is the question, how green is it ? …how do I know or is just passing itself off as green?  you know the drill…on and on… So imagine my disappointment…I found a great detergent for washing dishes at the sink.  It is green.  I tried another green one about 4 months ago and hated it – so I made sure to go back and buy the one I liked again.

Well, for the past 2 weeks, my liquid has been threatening to completely disappear from the bottle – it is almost gone.  I went to the store – they said it would be in in a few days.  I went back to the store- they said it’s been discontinued. NO-O-O-O-O=O!!!  I called 2 of the chain’s other stores.  The second one had 5 of them on the shelf.  I asked them to put them aside for me.  Now you know these will probably last for 2 years or close to it!  Whew!! I feel relieved!  That gives me a reprieve…some time to find another product that is comparable!

We have all had the same situation with many other products, your mascara no longer comes in dark brown (it’s only available in black now), the undies you’ve been buying for years don’t exist anymore, Mr Salty pretzels are nowhere! Why?  They were so good! Chef Boyardee canned cheese raviolis are gone! The worst is lipstick…they take away a favorite color and you are lost and bewildered in a sea of colors at the cosmetic counter.  That is such a hated job, finding the right lipstick, The list goes on and on and on…

It makes you wonder..the companies do much marketing to get people to try and buy a product and to enjoy that product..It’s odd that the people don”t count …of course most products are probably discontinued due to lack of sales….it just seems there should be something in place to poll people to see if they are ready to give up that item…I guess there is already..it’s called sales…but maybe they could try to create a more sophisticated system.  The fact that WE aren’t buying ENOUGH of the item doesn’t mean we aren’t important, does it?

So it comes down to the fact that we Americans, who have so much available to us, simply can’t have what we want always. We have to adapt to not being able to find Zero candy bars and so many other items…sometimes we don’t even realize an item isn’t around.  It suddenly pops into your head,”Hey! Whatever happened to….?”

My advice is that after you have found that you like an item, go back and stock up…get a year’s worth to ease your pain should that item disappear from the store shelves.

I would love to hear from you if you have some items that have disappointed you by disappearing…

This is MeddlingMom…

Really? Bristol beats Brandy?

November 17, 2010

Dancing With the Stars has gone awry!  Read my blog from November 10, 2010…enough said!

Take a look at this video http://www.usmagazine.com/healthylifestyle/news/the-situation-offers-bristol-palin-magnum-condoms-20101611

Technology-here’s real help for those who are challenged!

September 17, 2010

Several months ago, I received a message from my daughter who knows just how technologically challenged I am. I am self-taught on the computer.  I do pretty well, but there is so much that I don’t know how to do, especially when it comes to refining work. There is a new-ish company called FloH Club (as in Florence Henderson of Brady Bunch fame).  Florence Henderson who is in her 70’s felt that there was a need for tech support for seniors. Don’t worry if you aren’t a senior citizen;  FloH Club does not discriminate if you are not a senior and need help.  Becoming a member has made such a difference to me; I feel such relief.  For $25/month or $250/year, I can call anytime I need help with my computer and anything related to the computer.  This is great for the Baby Boomers…I no longer feel so vulnerable when I need help understanding what to do when I receive weird messages (and I know you receive these, too!).

FloH Club even gives you a link on your desktop; when you need help, you simply open it, click on and it issues you a ticket number.  You call and give that number to the tech who will be working with you.

Another site for those who are challenged…check out eldergadget…if you google “floh club”, you’ll come up with some other helpful sites for the “challenged”.

This is MeddlingMom…good luck with your computer, etc.

Sons and Daughters-Going Off to College-The Empty Nest

September 9, 2010

I wonder about you moms and dads whose sons and daughters have left home to go off to college..How are you doing? This is a time that is fraught with emotions. It can be exhilarating, exhausting, thrilling, fun and sad..The past year (s) have required much preparation and planning so that you and your child (adult?) are in good shape fot the transition and so that the school selection is correct. It takes such a huge effort to do all that is needed…college applications, waiting to be accepted (or rejected), planning “the move” and all of the necessary purchases, driving or flying to the school and helping your young person to move in. For some help on what is necessary for freshman, go to www.freshmanchecklist.com and check on “see the full list”…and mom and dad,  you might get some tips here for YOUR technology needs. Then there is the concern that your son or daughter will miss you or be lonely or homesick. You go home and find out just how much you miss your son or daughter!  This can be a rude awakening.  I heard on NPR yesterday that the average college freshman has 14 contacts with parents per week…that is truly amazing and it is a huge change from years ago when moms and dads had a hard time “catching” their college student once a week and when students had to use the hall payphone!…It is nuce for parents to have contact, but I imagine there are some this week who wish they’d receive just a few less updates from Junior and Princess…  After all, you ARE supposed to be enjoying the empty or emptier nest, right?

Be sure to take a look at my website: www. chaoscontrolcoaching.com for some interesting articles.  If you have a son who is away, a great way to be sure he has his personal toiletries (you know how much he HATES to shop for such things!) is to subscribe for him…a monthly delivery from www.automated mom.com.  He’ll be kept supplied with  a multitude of necessities (including condoms-if you choose to have that be a part of your order).

Have a great day and enjoy the newfound silence in your home…

MeddlingMom

Astrology, Mercury in retrograde and a Full Moon!

April 27, 2010

This is MeddlingMom,

Astrology is impacting my life this week; see what you think. How much do you know about it?

I wonder how your week is going. I had a great weekend, though Sunday (during the day) felt a little stressful. Sunday evening, I received an unsettling phone call that one of the children I care for each day will not be returning to the daycare. Things have been going smoothly in the daycare. I recently hired someone to help part time and she is working out nicely. My daycare contract states that 30 days notice is required for termination.  There was NO NOTICE given.  Anyway, such a change impacts my income and that of my employee. It also feels pretty crummy to have no notice because each child is very special to me and would be missed. I put a lot of time and energy into learning to understand what each child needs and how each child functions. Unique individuals….So there was definitely an OUCH! factor involved here. I also have the consideration of whether my new employee will feel threatened or upset by the news wondering whether her job and her income are in jeopardy.  So that was a conversation that happened several times over…I will work diligently to add another child to the daycare, part time or full time.

This morning I backed my car into my employee’s car……c.r ..u.n.c.h.!  I had no idea there was anything in back of me…Ugh! That was when we were getting ready to take the children to story time at the library. I was really rattled…I had already whacked my head hard on my car while leaning into the car. The kids were clamoring at the front door, banging on it…letting me know they were ready to leave…so I was just a little distracted…not an excuse.  Luckily it looks like there isn’t too much damage to Missy’s car or to mine.

All of these events are baffling to say the least. My life has been going along so smoothly. Although I work long hours, things have been rather seamless. Then someone mentioned to me yesterday that Mercury is in retrograde and has been since April 18…that explains  a lot. Things seem to go haywire and just don’t work when Mercury is in retrograde. Unfortunately, this will be the situation until May 13.  Then I found out that there will be a full moon on April 28. A  full moon usually impacts at least a week around the actual date. These two factors allow me to have some understanding regarding the shambles my life appears to be this week. Full moons can be emotional times; people seem to do things that make no sense at all, things that are out of character for that individual.

What I am wondering is whether you are experiencing upsetting moments due to Mercury in retrograde or the upcoming full moon.

Have a smooth day…

Easter and other holidays

April 5, 2010

Yesterday was Easter…what did you do? Is it a big holiday for you, do you celebrate it with your family or do you prefer to treat it like any other day, rather than a holiday…or perhaps you aren’t a Christian and don’t acknowledge it at all.  This year my partner and I did nothing about the holiday…we seem to be very busy in our every day lives so we decided to just be…in the house…quietly doing whatever we wanted…not needing a ham or lamb or anything except solitude and peace.  It was a great day..for me going through bags of paper…mail, notes to myself, lists, periodicals, catalogs, coupons and so much more.  Do you have paper clutter at your house?  Mine is just insane, so it was great to have a day where I could look through and purge much of it…

Actually on Friday some young friends of ours who do not happen to be Christian were here and we cooked 3 dozen eggs which they happily dyed and decorated; they had a great time…so we really felt we had already done a little something for Easter.

I encourage you  to spend your time as you wish, doing what makes you happy and content; usually we spend holidays with family. We always have a great time, just as we did yesterday.
On another note, I heard about two books this morning while watching Good Morning America on ABC.

Take a look at “This Is Not The Story You Think It Is” by Laura Munson.  It is Ms. Munson’s story about taking charge of her life when she had marital problems, about becoming powerful rather than powerless and assessing what she wanted and needed..

The other book, written by Suzy Welch is entitled “10-10-10”.  Her book is about a systematic way of making the right decisions about your life, incorporating your values and priorities into the decision-making process. The paperback edition has a workbook in it also.

Have a good day. Hope your Easter was as good as mine…

This is MeddlingMom…

Meditation and other ways towards self-discovery

March 17, 2010

I read a blog this morning about meditation and how people struggle to “do it the right way” as if there is such a thing..it is merely a tool.

Here is my response to that blog:

Meditation…I agree with you…it is helpful and can be done anywhere…I wanted to mention to you that something  I have found to be useful in  moving to a different level of understanding of myself/self-discovery is to do stream of consciousness writing...that is when you decide to write for a specific number of minutes without restricting yourself to a subject …you just let words flow with no regard to spelling , punctuation, penmanship…you might be writing, I don’t know why I am doing this stupid exercise ( yes, I have written that) or anything.  If you allow yourself the freedom to BE FREE in this exercise, you will always learn something about your feelings and your reality that you did not know before.  It is wonderful…. it is also a great exercise to do with a small group of people who you love.

Also, I have learned that I am 100% responsible for my life and its outcomes. This is very freeing to know … that I am the expert and that everything I need to know ultimately will be told to me by my heart, mind, soul and body if I allow it to speak to me and to  be heard…Obviously this also means that I will observe the world and people around me and hear what is offered; I will make sure I incorporate the wisdom of others.

I hope this has been useful for you.

My blog address is MeddlingMom.wordpress.com and my website is listed below.

http://www.chaoscontrolcoaching.com

On another note, be sure to check out www.automatedmom.com.  It is a new site with a great product and service. You can order a subscription so that your son or brother who is living away from home receives toiletries automatically. It is so simple. He will never have to shop for the mundane again and will always be assured of having what he needs for his personal care. The site is up,  though not working completely. The phone number is on the site (Order by Phone 888-315-3833),  so you an call to order if you cannot get through to the ordering page.

This is MeddlingMom…have a good day!

Procrastination

December 13, 2009

This is MeddlingMom.

I had a great time yesterday visiting with some friends, having a nice homemade meal  and playing with their little girl.  Here I sit today…it is nearly 6 PM,…and I have a list a mile long of things I must accomplish in the next week. I’ve completed nothing, nada! I haven’t even showered…I guess we all have days like this…the only problem is that tomorrow at 7:30AM, my doors open for business…I have a small daycare in my home…the little ones will be arriving and I will lose all ability to accomplish anything on my list until after 5:30PM…such is life…Of course we all know we need some down time to simply be mindless and we know that everything that needs to be done, WILL be done!  At some point, we recognize that there is no choice and no more time to procrastinate

So I wonder what you do to cut to the chase and to manage your list…my list seems to grow and grow with little opportunity to have many items crossed off of it…I am open to suggestion….

I guess I will go look at my list, attempt to complete a few small items, have a shower, have dinner and settle in to some  fun TV…60 Minutes, Oprah’s special at the Whitehouse…of course Brothers and Sisters isn’t on tonight due to Oprah’s special.  I don’t feel particularly stressed about any of this right now; I feel pretty zen…at least ’til I stop typing this …

Have a good night.


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