Wal-Mart Faces Its Day of Reckoning

By Frank Nelson, Miller-McCune.com. Posted August 24, 2009.

Since Sam Walton opened the first Wal-Mart in Rogers, Ark., in 1962, the company has grown into a global retailing colossus employing more than 2 million people in almost 8,000 stores worldwide and ringing up annual sales topping $400 billion.

The sheer size and scale of the empire is such that when someone holds up a mirror to Wal-Mart, what we see reflected back are many of today's most potent social, political, economic and cultural issues.

Labor historian Nelson Lichtenstein, a professor at the University of California, Santa Barbara, provides such a mirror in his latest book, The Retail Revolution: How Wal-Mart Created a Brave New World of Business.

He previously edited a collection of essays on Wal-Mart published in 2006 that defined the chain as "the face of 21st century capitalism." He began to focus on the company during the long-running 2003-2004 grocery store strike in Southern California, when three major grocery chains cited fear of Wal-Mart selling groceries for their hard-line stance in negotiations.

As a labor historian, he was a close observer of the dispute and became a regular source for reporters. He even sent his students to interview picketing grocery workers, and in April 2004, he organized a one-day conference on Wal-Mart at the UCSB campus.

"For 20 years I studied the auto industry, the classic industry of the 20th century," he said. "Then it dawned on me that retail, and Wal-Mart in particular, had in some sense taken over that role as the most important and influential industry."

In The Retail Revolution, he offers a detailed critique of the controversial company that so many people love to frequent and others to hate, and he drills deep into the corporate culture, history and past performance, distilling a sense of where the company stands now and where it goes from here.

He says Wal-Mart came to prominence during the conservative era of the early 1970s and the '80s and always prided itself on proclaiming, "Wal-Mart is America." Now, he says, the problems of Wal-Mart are the problems of America.

Lichtenstein focuses on topics that are as close to the heart of Wal-Mart as they are to the new Obama administration and many American citizens: the environment, health care reform, labor relations and what's happening in China.

He concludes that Wal-Mart, for so long the undisputed alpha male of the U.S. retail pack, faces a day of reckoning, to some extent, on all these issues. "Wal-Mart knows it has to change," he says, echoing Obama's message to the American people.

On the environment, for example, Wal-Mart recently sprang a surprise by announcing its intention to give an "eco-rating" to each of the hundreds of thousands of products carried in its stores.

Under the plan, which paints Wal-Mart an uncharacteristic shade of green, every product will carry a sustainability pedigree detailing its environmental history and impact.

According to Lichtenstein, Wal-Mart has long drawn environmental scorn, with critics characterizing its stores as big, ugly boxes often plunked down on "greenfield" developments where they proceed to suck the retailing lifeblood out of neighboring communities. The most prominent current fight is over what is actually a "battlefield" development -- a  coalition of political odd befellows and celebrities have joined locals opposed to placing a Wal-Mart Superstore on the site of the Cil War's battle of the Wilderness in Northern Virginia.

He says the company has adopted various measures to placate its critics -- shrinking the gas consumption of its vehicle fleet and energy use in stores, reducing packaging and stocking "green" items like fluorescent bulbs and organic cotton clothing.

However, Lichtenstein, who admits he's no Wal-Mart fan, notes such moves also saved or made money for the company. Still, he applauds the latest proposal for a sustainable product index: "I'm willing to give them some credit on this one."

See more stories tagged with: labor, china, wal-mart, economy, health reform

Frank Nelson has written for newspapers and magazines in England (his original home), New Zealand (his adopted home), Australia (a temporary home) and the United States (his current home).

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