Walmart Sans Frontieres – We Told You So
Ever since last June, when it was announced that Wal-Mart was taking over Britain’s thirdlargest supermarket chain, Asda, in a deal worth ?6.7 billion – a deal which doubled its overseas business overnight – we have heard the same message from all sides: Wal-Mart is good for the consumer. The government thinks so – Wal-Mart’s executives held a toplevel personal meeting with Tony Blair before the Asda takeover, during which they were given the green light for expansion in the UK. The media thinks so – national papers from the Guardian to the Daily Telegraph have praised the store.
We have heard less, though, about what Wal-Mart will be bad for. And when its record in the States and elsewhere is examined, we can begin to get a good idea. Wal-Mart will, in all likelihood, be bad for the British countryside and the wider environment; bad for workers, both in Britain and abroad; bad for jobs; bad for small communities and independent shops; bad for local economies; bad, even, for other supermarkets. Bad, in other words, for almost everyone but Wal-Mart.
Wal-Mart’s takeover of Asda is more – much more – than one supermarket merging with, or even being swallowed by, another. It is the likely beginning of a retail revolution, which could change more than just shopping habits. Wal-Mart’s aggressive ‘lowcost at any price’ culture, according to serious retail analysts, looks set to force a series of megamergers that could, within a decade or less, leave only Wal-Mart, and possibly one competitor, standing. Britain could be on the verge of a vast upheaval that it is utterly unprepared for.
Food & Drink Europe, 14 February 2006
Asda Wal-Mart has been fined ?850,000 in the UK for offering employees a pay rise to give up union rights, spelling a PR disaster for the company already suffering from a scathing US documentary circuiting Europe.
A British employment tribunal found the American-owned supermarket chain guilty of promising 340 distribution staff a 10 per cent pay rise to give up the collective agreement negotiated by their union ? an act which is illegal under 1992 labour relations law.
The court ordered Asda to pay ?2,500 to each employee at the County Durham depot, but the world’s largest retailer looks likely to appeal.
A spokesperson said: ?We’re disappointed with the decision. We’re currently considering the 88-page judgement and whether we appeal.?
The conflict started when Asda took over the depot and tried to bring staff conditions in line with its other distribution centres across the North East.
A union agreement was drawn up covering workers’ rights under the new management, allegedly prompting the retailer to offer employees a paid incentive to weaken GMB resolve.
But Asda stresses the deal was ?absolutely not about the removal of collective bargaining – it was simply a way of consulting our people as to whether they wanted to move into line with the employment terms at the Asda depot next door.?
Meanwhile Paul Kenny, GMB acting general secretary said: ?The Asda management need to take a clear message from [the tribunal]. GMB is not going away and the union will fight on every front to protect our member’s rights”.
The supermarket is currently feeling the heat elsewhere in Europe, as Wal-Mart: The High Cost of Low Price received rapturous praise at the Berlin film festival over the weekend.
The documentary, made by maverick American director Robert Greenwald, tells the stories of aggrieved employees and small retailers who have suffered under monopolisation by the supermarket heavyweight.
An east London fruit seller also features in the film, which will enjoy Europe-wide general release this April.
Greenwald told audiences in Germany: ?Wal-Mart is the poster child for the worst in corporate behaviour.?
?They have a culture that says its OK to do anything as long as its good for profits.?
But its UK subsidiary is also no stranger to bad publicity. Last year Asda’s treatment of workers was widely condemned by unions and charities claiming the firm had drawn up a ?chip away strategy? to reduce costs and increase productivity.
According to leaked documents acquired by UK-based charity War on Want in October, the company wants to remove the right of staff to take industrial disputes to the arbitration service and implement the use of ?single man loading’ for jobs that involve lifting, even though Asda’s own risk assessment acknowledges the need for two people to undertake such tasks.
And the latest row to erupt between workers and the company saw GMB officials telling senior management they were furious that 100,000 out of 140,000 employees will not be receiving a bonus despite ?650 million profits last year, signaling a huge internal backlash for the company.
Wal-Mart is the leading US food retailer and has a global turnover of $160 billion, employing 1.5mn workers. In the UK Asda Wal-Mart holds second place behind Tesco, with a market share of 16.7 per cent.
