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8/17/2003

Bottom line

By Kevin Darst
The Daily Times-Call

If a Wal-Mart Supercenter lands in north Longmont, customers could be faced with a choice: buying from a company that some criticize for its treatment of workers, or continuing to patronize groceries that generally have higher baseline prices.

It’s a decision that might come down to the bottom line on a receipt.

Unions and other grocery store chains that employ union workers chide Wal-Mart for paying wages that, in some cases, equal half of the union wage. Wal-Mart benefits for nonmanagers are scarce, critics say.

The company has lost at least two lawsuits in the past year filed by workers who said they were forced to work off the clock or had overtime erased from their timecards by payroll managers, including one filed by Wal-Mart workers in Denver.

A federal suit filed in May by seven female former and current Wal-Mart employees accused the retail giant of a sexist work environment in which men are paid more than women and advance more quickly through the company hierarchy. Though more than half of the company’s workers are women, about one-third are managers, the suit alleges.

Wal-Mart says its codes prohibit off-the-clock work and that it provides employment opportunity to people who otherwise might not have it. Wal-Mart Stores Inc., which includes SAM’S Club and the company’s logistics facilities, is the leading private employer of emerging groups in the United States, employing more than 160,000 black Americans and more than 105,000 Hispanics, according to Wal-Mart’s Web site.

“I used to blame people (who shopped at Wal-Mart) for engaging in me-ism — it’s all about me, me, me — that’s what hurts” said Ernest Duran Jr., president of the Local 7 Wheat Ridge branch of the United Commercial and Food Workers Union. “But in these economic times, people do what they have to do to survive. That’s necessity, not me-ism.”

People who shop at Wal-Mart’s grocery stores might expect to pay less than they would at chains such as King Soopers, Safeway and Albertson’s, according to a Times-Call price comparison of 34 items at the three groceries in Longmont and Fort Collins and the Wal-Mart Supercenter in Fort Collins.

Prices at the three grocery chains’ Fort Collins stores were the same as prices in Longmont.

Using nonsale prices for produce and name-brand food items, Safeway, King Soopers and Albertson’s came out within 50 cents of one another, hovering in the $98 range. Those items at the Super Wal-Mart in Fort Collins cost about $74 — nearly 25 percent less.

Leading grocers quickly point out that bonus card savings and other sales can give any store the lowest price on any given day. Likewise, grocers offer store brands at lower prices.

In the absence of sale prices, which come and go

weekly, Wal-Mart’s prices routinely beat the competition based on the items in the Times-Call comparison.

A 24-ounce bottle of Hidden Valley Ranch dressing, for example, was $4.49 at Longmont’s three major chain grocers; Wal-Mart charged $3.33 for the bottle.

A 16-ounce package of Oscar Meyer bacon was $5.79 at Albertson’s and $5.49 at King Soopers and Safeway; Wal-Mart charged $4.66 for the package.

A loaf of Orowheat Whole Wheat bread was $2.99 at Albertson’s, $2.89 at King Soopers and Safeway, and $2.14 at the Fort Collins Super Wal-Mart.

Store-brand eggs were cheaper at Wal-Mart than its Longmont counterparts, as was a pound of store-brand butter.

A gallon of Meadow Gold Viva 1 percent milk was cheaper at Wal-Mart than its competition. Wal-Mart was about $2 cheaper for a 24-roll package of Charmin single-ply toilet paper.

“Price studies really are a snapshot in time of a very few products,” Safeway spokesman Jeff Stroh said, adding that the store carries about 60,000 items. “They’re pretty meaningless to people who understand the industry.

“You have to be leery of small snapshots for price comparison purposes.”

Wal-Mart couldn’t beat at least one of the Longmont grocers on Romaine lettuce, Red Delicious apples, ground beef or a 10-pound bag of Gold Medal all-purpose flour.

Wal-Mart last year surpassed Kroger, which owns King Soopers, as the nation’s largest grocer with about $53 billion in sales and currently has about 15 percent of the market share.

Wal-Mart is more successful outside of the nation’s 100 biggest metropolitan areas, according to a Merrill Lynch study, where nearly 70 percent of Wal-Mart’s 1,364 Supercenters lie.

The 30 percent of Supercenters in the top 100 metro areas, where 68 percent of the nation’s food dollars are spent, according to Forbes magazine, have had less success.

In the top 26 markets in 2002, Wal-Mart had a 3.65 percent market share, according to Merrill Lynch, who said Albertson’s has suffered the most from Wal-Mart’s competition.

The company tends to do better in predominantly Republican areas, according to Merrill Lynch.

So how does Wal-Mart do it? And how much does price matter to customers?

The company’s tremendous buying power — it’s the world’s largest retailer in terms of sales and has 2,864 stores, 528 SAM’S Clubs, 53 Neighborhood Markets and 1,305 international stores — and a distribution system some analysts call the most-efficient in the industry help Wal-Mart keep prices down.

Labor, typically a business’s largest controllable expense, is another primary factor.

Wal-Mart has 1 million employees in the United States.

The company’s treatment of workers is one reason Duran has urged consumers to boycott the store.

“What (Wal-Mart employees) can expect is that they’ll be paid less than someone at a unionized store,” Duran said. “Checkers, stockers, tops, will make about $7 an hour. And they don’t provide health insurance.”

Wal-Mart recently lost lawsuits in Colorado and Oregon, where workers said store managers forced them to work off the clock and overtime was erased from timecards using the company’s computer system, which allows managers to edit timecards, according to the New York Times.

Wal-Mart officials did not return phone calls seeking comment.

“They’re the biggest, richest corporation in the world and they teach (employees) how to get public assistance. (Wal-Mart’s) profits are being subsidized by taxpayers,” Duran said.

While it currently does not recognize unions, Wal-Mart faces increasing pressure to allow union workers.

“At Wal-Mart, we respect the individual rights of our associates and encourage them to express their ideas, comments and concerns,” the company said in a statement on its Web site. “Because we believe in maintaining an environment of open communications, we do not believe there is a need for third-party representation.”

A Safeway clerk could expect to make about $15 an hour plus benefits, which would take compensation to about $22 an hour, Stroh said. Wal-Mart, King Soopers and Albertson’s did not return phone calls seeking comment.

“We believe we offer excellent wages, outstanding benefits and a career path that takes employees as far as they want to go,” Stroh said.

Safeway’s customer service, quality meats and produce and overall value keep customers coming back to the store, Stroh said.

“It’s how you feel when you leave the grocery store, if you know produce and meat is quality, if you’ve been treated fairly,” Stroh said.

If a Wal-Mart Supercenter sprouts at the northeast corner of Colo. Highway 66 and U.S. 287, it will go beyond that, Duran said.

“People will shop there,” Duran said. “And we’ll lose jobs and stores that pay good wages.”

Kevin Darst can be reached at 303-776-2244, Ext. 405, or by e-mail at kdarst@timescall.com.