By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
Shortly after 7:30 a.m. on a brutally cold January morning, the parking lot of the Inver Grove HFeights Wal-Mart is packed with vehicles. Inside the store, several hundred people are gathered beneath the fluorescent lights and red, white, and blue balloons. The shelves are freshly stocked with $2 boxes of Chips Ahoy cookies and $2.77 12-packs of Angel Soft toilet paper.
Veterans of Foreign Wars, Post 295, of South St. Paul, has just presented the country's colors. Now store manager John Hamm steps up to the microphone and begins ticking off a list of local organizations that have received donations from the Bentonville, Arkansas-based retailing behemoth in celebration of the store's opening: the Simley Theater Guild, the Eagan Heights Figure Skating Club, local police and fire departments, the Inver Grove Heights School District. The contributions total $24,000--or roughly the amount Wal-Mart takes in every three seconds.
After Inver Grove Heights Mayor George Tourville declares it a "great day," the Simley High School dance team takes the floor. A dozen or so girls in black tights and glittery tops perform a high-stepping routine to some Mellencampesque rock music.
Then it's time for the ritual that culminates the opening of every Wal-Mart store around the world: the Wal-Mart cheer. Led by Hamm, several hundred enthusiastic adults shout out a call-and-response salute to the mighty retailer:
Give me a W! W!
Give me an A! A!
Give me an L! L!
Give me a Squiggly! Squiggly!
Give me an M! M!
Give me an A! A!
Give me an R! R!
Give me a T! T!
What's that spell?
Whose Wal-Mart is it?
Who's number one?
The Customer! Always!
And with that, Wal-Mart has established another outpost in its retailing empire. There are roughly 3,500 Wal-Mart stores across the country--more than twice as many as those of its closest competitor, Target Corporation--with new stores launching at a rate of nearly one per day. The Inver Grove Heights opening marks the company's 59th outlet in Minnesota. But until recently, the glories of $3 gallon jars of pickles and Ol' Roy dog food (named after Wal-Mart founder Sam Walton's English setter) have only been available in outer-ring suburbs and rural Minnesota.
Now Wal-Mart is set to conquer the Twin Cities. New stores are slated for Woodbury and West St. Paul. There's talk of a Wal-Mart anchoring the redevelopment of Apache Plaza in St. Anthony, and Oakdale has been courting the retailer. In May Wal-Mart is supposed to take over the former Kmart location in St. Paul's Midway Shopping Center, marking its first foray inside the I-494 corridor.
The reason for the company's rapid urban expansion is simple: It's the last segment of the retail market left to conquer. "That's a new frontier for all of these big retail companies," says Stacy Mitchell, a researcher at the Institute for Local Self-Reliance who has studied Wal-Mart extensively. "They've saturated the suburbs and small towns. This is where they have to grow."
Wal-Mart is, by far, the largest corporation in the world, with sales last year of $244.5 billion--or more than five times those of Target. It employs 1.3 million people and is the largest employer in almost half the states in the country. The company easily sells more detergent, dog food, toothpaste, shampoo, deodorant, and diapers than any other retailer and operates the largest fleet of trucks in the country. In fact, according to Fortune magazine, Wal-Mart is now responsible for 2.3 percent of the country's gross national product, a figure approaching the dominance of U.S. Steel during World War I and General Motors in the 1950s.
The growth of Wal-Mart has long been mythologized as some kind of modern-day corporate Horatio Alger story, with its folksy founder transforming a humble Arkansas retail operation into a multi-billion-dollar cultural phenomenon. In the last few years, however, the facade--symbolized by the company's ubiquitous yellow smiley face icon--has begun to crack. Stories of Wal-Mart's dreadful treatment of its employees and ruthless business practices have become too ubiquitous to ignore. The company's relentless emphasis on cheap prices is driving manufacturers to open plants overseas and causing competing retailers to cut employee wages and benefits.
A case in point is Target Corporation. Starting this month, Target employees who work less than 20 hours per week are no longer eligible for paid vacation and health care coverage. The Minnesota-based retailer has also joined Wal-Mart in relentlessly pressuring manufacturers to lower costs: A recent UBS survey found that Target has successfully narrowed the pricing gap so that its prices are now just 4 percent higher than those of its gargantuan rival.
Another illustration of Wal-Mart's impact on other retailers is the protracted labor dispute that recently ended in southern California. From last October to February, some 60,000 supermarket employees were either on strike or locked out of their jobs. The companies successfully demanded concessions on wages and benefits in order to better compete with Wal-Mart. The fallout from that strike could have profound ramifications for workers in the Twin Cities and across the country. "If they can do it to us here, then Katie, bar the door," says Michael Straeter, president of United Food and Commercial Workers, Local 1442, one of the affected unions.