Wal-Mart's Strategy to Control Product Lines

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Publication: Arkansas Democrat-Gazette
Page(s): A1
Section: A1
Original Date: 06/05/1999
Watch the Web, Wal-Mart CEO says Cybersales to 'crank up,'
shareholders told
KRISTAL L. KUYKENDALL ARKANSAS DEMOCRAT-GAZETTE
FAYETTEVILLE -- Wal-Mart Stores Inc. plans to "crank up" its Internet sales effort, Chief Executive
Officer David Glass said at the annual shareholders meeting Friday.
Glass did not provide details, amid growing speculation the Bentonville retailer will make a strong push to grab a
slice of the increasingly lucrative online market. He said the company, in trying to capture nonstore retailing
dollars, has in the past considered home-shopping networks and catalogs but chose not to enter those markets.
"We want to serve the customer who wants to shop at home," he said. A few years ago, the retailer created a
World Wide Web site. Glass promised Friday that Wal-Mart will "crank up its initiative on the Internet" later this
year.
For the past several months industry watchers have speculated that Wal-Mart is planning a major upgrade of its
Web site to compete better with Amazon.com Inc., Toys R Us Inc. and others with strong Web presences.
Asked later by a shareholder for more details of what may be in store, Wal-Mart Online chief Glenn Habern said
there's an "effort under way, but we're not ready to talk about it yet."
At the Friday meeting, shareholders witnessed few surprises. Company officials, continuing to be secretive
about the strategy of the world's largest retailer, said little about the Web venture or Wal-Mart's experimental
Neighborhood Market concept.
Shareholders seeking details about either subject were rebuffed during the question and answer period of the
meeting. Still, they have reasons to be happy: The stock of the $137 billion retailer split in April, and shares have
risen more than 50 percent since last June.
The "first lady" of Wal-Mart did make an unexpected appearance. A week ago, Wal-Mart said Helen Walton, the
widow of Wal-Mart founder Sam Walton, was still recovering from serious injuries suffered in a car accident and
wouldn't attend.
Then, several hours into the meeting at Bud Walton Arena, a security guard propelled her out in a wheelchair,
her daughter Alice at her side. In a red suit, Walton smiled feebly while the crowd gave her a five-minute
standing ovation.
Shareholders hoping to hear Wal-Mart officials talk about their plans for the Neighborhood Markets left
disappointed.
The stores, at 40,000 square feet, are much like traditional groceries. Wal-Mart has been testing four of the
prototypes in Arkansas since last fall. Glass said the Bentonville store has undergone extensive "fiddling" as
executives have worked to improve the format.
He said Wal-Mart has approved 10 new distribution centers, now being built. That includes four general
merchandise and four food distribution centers. The food centers would support new Supercenters under
construction but also could supply new Neighborhood Market stores.
Glass didn't give many details about how a roll-out of the markets might proceed; he said only that Wal-Mart
"has become much more comfortable" with the concept and that the company will continue to build the stores.
One will open in Fayetteville and two in Oklahoma City later this year.
Meanwhile, the company is continuing its rapid roll-out of its established store formats, Glass said.
The Bentonville retailer will open 275 to 285 stores in the year that ends Jan. 31, 2000, he said. That includes
40 new discount stores, 150 of the massive Supercenters, 10 to 15 Sam's Clubs and 75 to 80 stores abroad.
Ninety of the new Supercenters will be converted discount stores.
Glass said the new international stores will be in existing markets. Earlier this year, after international division
chief Bobby Martin visited British Prime Minister Tony Blair, speculation arose that Wal-Mart was considering
entering new markets. The retailer later said firmly that it has no such plans this year.
Also during the meeting, Wal-Mart's 15 board members were re-elected, and shareholders approved a doubling
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in the number of available shares of common stock for future use, to 11 billion.
Shareholders also rejected four proposals, all opposed by the board, one of which would have tied the level of
executive compensation to the company's financial performance.
Slug Line: Bwm-meeting05 FOR 1A
This article was published on page A1 of the Saturday, June 05, 1999 edition in the A1 section.
2 of 2 1/2/11 8:01 PM

Stories Go
Page(s): BM11
Section: BM11
Retail: Wal-Mart buys brands to control product lines
*NW EDITION* When Wal-Mart Stores Inc. recently bought the Sasson brand of apparel, it continued to
hone an approach that gives the retailer advantages over the standard way of doing things.
Traditionally, companies that hold licenses for branded products strike deals with numerous retailers to sell their
wares. Usually, the same popular brands of toys, jewelry, household goods, office supplies and electronics are
sold in many retailers' stores.
Sometimes, when a brand is unique or appears poised to take off, a retailer will pay a fee or a percentage to the
brand owner (or take a smaller cut of each sale) to be the exclusive retailer selling that brand. These deals are
often struck for apparel lines, as well as for some home improvement products.
But Wal-Mart, ever the aggressor, no longer stops there.
When the opportunity presents itself, the world's largest retailer snatches up brands entirely, license and all. The
approach gives Wal-Mart more control over a line's image, quality, price and profitability, and likely at a bargain
price because the brands tend to be lesser known, experts say.
It's just one more way for Wal-Mart to gain the upper hand in the battle for consumer dollars and loyalty.
"It makes sense for the retailer to do this," said retail analyst Alan Mak of Argus Research in New York. "It
somewhat elevates their image because these were well-known brands at one point."
Certainly, Wal-Mart still has "normal" brand-retailer relationships. It sells tens of thousands of items that fill the
shelves of every general merchandise store in the country: Tide detergent, Crest toothpaste, Ivory soap, Hasbro
toys, Bic ink pens, RCA stereos.
It also has exclusive agreements with popular lines, such as Better Homes & Gardens outdoor supplies, Popular
Mechanics tools and Magic Chef kitchen items. Kmart Corp. and Target Stores have similar licensing
agreements with some of their popular brands. Target, for example, has the lone rights to sell Cherokee clothing
for women and children.
But Wal-Mart appears to be the leader in outright purchases of established brands, experts say. It has bought at
least five.
Last month, the Bentonville retailer paid an undisclosed sum for Sasson, which sold well at high-end department
stores Bloomingdale's and Saks Fifth Avenue in the early 1980s.
Wal-Mart's earliest such purchase could have been eight years ago, officials say, when Wal-Mart bought Equate,
a brand of discounted pharmaceuticals and health and beauty aids.
The deal has proved lucrative for Wal-Mart, analysts say. The company wouldn't release sales figures, but the
brand is prevalent throughout the chain's health and beauty departments. And it appears to be doing well, by
design: Containers describe what name-brand product each Equate item is similar to, and each is deliberately
placed next to competing products.
Another example of a brand purchase is Wal-Mart's Faded Glory line of apparel, acquired several years ago.
Although the brand is no Gap or even a Kathie Lee (which is licensed exclusively to, but not owned by,
Wal-Mart), Faded Glory appears in several Internet magazine articles on affordable fashion picks for teens and
young women.
If Wal-Mart buys a brand for a reasonable price, it's likely to turn out to be a good deal, said Brandon Cashion,
vice president of brand consulting firm Addison Whitney in New York.
"Owning and managing a brand is very different from just selling it," he said. "Wal-Mart can promote it, have
control over the message that accompanies it, build it. ... They have the opportunity to influence how the brand
is perceived.
"If you just sell something, you're under the control of the brand owner," Cashion said.
To be sure, the advantages of owning a brand aren't lost on Wal-Mart.
"When you purchase a brand, you've got brand recognition already -- you don't have to build up that name,"
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reserved.
Wal-Mart spokesman Laura Pope said. "It's a quicker means to making customers aware of your product.
They've already attached a value to it, whether it be the quality or the design."
Sasson was a premium brand name that fell out of the spotlight. Sasson jeans commercials once filled the
airwaves.
"Sasson had a very positive brand awareness during its heyday," Cashion said, "and it was reasonably
expensive."
Wal-Mart is trying to revitalize a brand that pulled in high profits and that gives the discount retailer a higher-end
line of clothing, he said.
In this case, it may be hard to pull off, Cashion said.
"It's very hard to revitalize a brand that's been damaged or ignored for a number of years," he said. "But it's a
great opportunity to build something if the brand's perception is still positive."
Cutline: Arkansas Democrat-Gazette/MICHAEL MARSHALL DeeDee Baker of Delaney fills racks with Faded
Glory women's apparel at the Wal-Mart Supercenter in north Fayetteville. Faded Glory is one of several brand
names that Wal-Mart has bought to sell exclusively.
Slug Line: walmart 8/8
This article was published on page BM11 of the Sunday, August 08, 1999 edition in the BM11 section.
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Page(s): BM16
Section: BM16
Cover Story The Grocery Gamble Wal-Mart gears up to go head to head
with the nation's supermarkets
*NW EDITION* It s no secret that Wal-Mart Stores Inc., long the king of discount retailing, is looking to
take a big bite out of the grocery industry.
The question is how and when they re going to do it.
The Bentonville retailer first experimented with groceries in its Supercenters. But the huge parking lots and
cavernous stores didn t lend themselves to quick shopping trips.
Since last fall, the world s largest retailer has been testing a new concept, the Neighborhood Market. The
40,000-square-foot stores are one-fifth the size of a Supercenter. Wal-Mart won t release sales figures for its first
four stores, but new Neighborhood Markets are planned.
A Wal-Mart official revealed in an interview that the company will open its fifth, sixth and seventh stores this
year: one in Fayetteville and two in Oklahoma City.
Wal-Mart s leap into the traditional grocery format has sent tongues wagging across an industry that is highly
competitive, fragmented and already too crowded with stores, analysts say.
Wal-Mart doesn t seem worried about its prospects.
Henry Jordan, director of operations for Wal-Mart s Neighborhood Market division, said the retailer has been
very happy with sales from its first four stores.
If history is any indication, Wal-Mart will be an aggressive rival. When the retailer started selling groceries in its
first Supercenter a decade ago, the concept took off like a grass fire. By the end of last year, Wal-Mart had
sprinted to third place in the grocery race, with about $32 billion of food sales.
Supermarket News, a leading industry publication, says Wal-Mart is the No. 3 food seller in the United States.
But Wal-Mart knows it has captured only a sliver of the $436 billion grocery pie.
FILLING A NICHE The idea behind the Wal-Mart Neighborhood Market came from customers who said they
needed a particular kind of convenience: speed.
There are certain times during customers schedules where they just need to drop in and pick up a few items,
and the Neighborhood Market is designed for that, Jordan said.
The Wal-Mart Neighborhood Market is basically a slimmed-down Supercenter. It stocks about 20,000 to 25,000
different items, selected from the 100,000 at a typical Supercenter.
The stores are about two-thirds groceries and one-third general merchandise, such as household goods, auto
supplies, health and beauty aids and toys. They don t have a deli counter or a bakery, but they have a
full-service pharmacy and a one-hour photo lab.
It s the first traditional grocery store to have a drive-through pharmacy. Customers using the drive-through can
pick up a pager, which buzzes when their order is filled.
Strategically, the small stores complement the Supercenters.
They boast similar low prices, benefiting from the company s size and efficient distribution network. They also
can fill market niches in towns not big enough for a Supercenter.
A main purpose of the Market is as a fill-in, said retail analyst Asma Usmani of Edward Jones in St. Louis.
Wal-Mart is looking at markets that are just too small for a Supercenter, she said.
Neighborhood Markets also may be ideal candidates for big urban centers with packed downtowns, Usmani
said. Those places, such as downtown Chicago, Boston or New York City, are too crowded for a giant
Supercenter.
THE STRATEGY Observers are watching closely for clues as to how Wal-Mart will roll out the latest weapon in
its retail arsenal.
Chuck Gilmer, editor of the grocery publication The Shelby Report, acknowledged industry whispers of a
possible acquisition by Wal-Mart.
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Specifically, he said, there were rumors of Wal-Mart s eyeing Winn-Dixie Stores Inc. of Jacksonville, Fla. The
chain has 1,178 stores, mostly in the Southeast, and brought in $13.9 billion in grocery sales last year.
But Winn-Dixie, which usually doesn t comment on speculation, has flatly denied the rumors, Gilmer noted.
For Wal-Mart, buying existing stores and Wal-Martizing them might be wise because it cuts the risk of adding
outlets to an overcrowded market.
The grocery industry is very mature, and already there are too many grocery stores for the nation s existing
population, said retail consultant Jerry Morton, who runs Store Systems Consulting in Lawrence, Kan.
Wal-Mart officials have not publicly ruled out the idea of acquiring a grocery chain, Usmani noted.
If an attractive deal comes on the block, Wal-Mart would definitely consider it, she said.
For the moment, Wal-Mart appears to be content to test the concept close to home, much as the retailer did
successfully with the Supercenter model. The testing schedule seems speeded up, though.
When Wal-Mart started its Supercenter trial in March 1988, it opened only one store. Nine months later, it
opened a second, then a third a few months after that.
From 1989-93, with a base of six Supercenters, Wal-Mart took its time getting things right, fine-tuning the
grocery side of the Supercenter operation. Then, when Wal-Mart opened its first grocery distribution center in
1993, the store format was able to take off.
Now, 11 years later, Wal-Mart boasts 591 Supercenters.
This time, because of advances in technology and in Wal-Mart s ability to monitor its sales, results of the
Neighborhood Market experiment will be available much sooner, Usmani said.
Chances are pretty high the Markets will be successful, Usmani said. I think within a year to 18 months we ll
start hearing about plans for an aggressive rollout of the stores.
Retail analyst Dan Barry of Merrill Lynch & Co. Inc. in New York thinks the company could announce plans
within a year for a significant expansion.
If that proves true, Wal-Mart, after rocking the retail boat with its discount stores and then with Supercenters, will
send yet another tidal wave through the industry.
That s because the Market concept is so much more flexible than previous Wal-Mart stores, experts say. The
adaptable design erases the limitations Wal-Mart faced with its larger discount stores and Supercenters.
But Wal-Mart will likely focus on the smaller markets before moving into any big cities, consultant Morton
predicted. For starters, urban real estate is much more expensive. Also, a move into crowded downtown areas
would almost certainly require an acquisition, and Morton doesn t think that s in Wal-Mart s cards any time soon.
It s just not typical for Wal-Mart to acquire retail outlets, he said. I d be surprised.
FRAGMENTED AND COMPETITIVE The measured pace of the Neighborhood Market s growth reflects an
appropriate caution by the world s largest retailer, experts say. The current overabundance of grocery stores
constantly hammers at the industry s profits and expansion opportunities.
It s a slow-growth industry that grows primarily with the population, said Patrick Schumann, a grocery analyst at
Edward Jones in St. Louis. People can only eat so much.
Plus, Schumann said, it s an extremely competitive sector.
It s very fragmented. You have thousands and thousands of players, and it makes for a tough environment, he
said.
The nation s top grocer, The Kroger Co. of Cincinnati, commands 10.8 percent market share, once its pending
merger with Fred Meyer Stores of Portland, Ore., is figured in. That s up from 7 percent last year.
Kroger, founded in 1883, has 2,200 grocery stores and 800 convenience stores. In 1998, it rang up $43.1 billion
in sales, according to Supermarket News and the Food Marketing Institute.
Kroger has 31 stores in Arkansas. Its North Little Rock store on John F. Kennedy Boulevard, recently renovated,
is about a mile from Wal-Mart s Neighborhood Market in Sherwood.
The Wal-Mart grocery seems to be standing its ground despite all the competition in the area. Besides the
Kroger, right down the street is a locally owned independent grocer and a brand new Harvest Foods
supermarket. But over two weeks recently, morning and evening visits to the Neighborhood Market showed a
parking lot always at least half full.
In Springdale, Wal-Mart's Neighborhood Market sits directly across the street from a Harps grocery. Harps Food
Stores Inc. officials did not return several calls seeking comment, but a large banner over the Harps door speaks
to the intense battle: WE WILL MATCH ANY WAL-MART AD!
On two recent weekday afternoons, Harps, which is 20,000 square feet bigger than its challenger, had about 20
more cars in its lot than the Market.
If the Neighborhood Markets take off, Wal-Mart could catch up with the No. 2 grocery retailer in the country,
Albertson s Inc. The Boise, Idaho, chain recently merged with American Stores of Salt Lake City. Once the
acquisition is completed, Albertsons will have about 2,500 stores in 25 states, including Arkansas, and 1998
sales of $35.7 billion.
Ranking right behind Wal-Mart is Safeway Inc. of Pleasanton, Calif. Safeway, with 1,541 stores in the western
half of the country, had $25 billion in sales last year.
A LEARNING PLATFORM Leading Wal-Mart s charge into the stepped-up battle for grocery market share is
Jordan, a private, humble 33-year-old who started out stocking shelves for Wal-Mart.
Since 1985, he earned his stripes managing a discount store, then a Supercenter. Most recently, he headed a
Supercenter district of 80 stores.
He s been in charge of the Neighborhood Market division since May 1998, when plans for the first few stores
started firming up.
Jordan refused to discuss the Wal-Mart strategy in much detail. He would not release details of the plans for the
2 of 6 1/2/11 8:02 PM

three new stores.
Two of the new groceries will mark the line s expansion outside Arkansas. Oklahoma City planning officials
confirmed that Wal-Mart has applied for building permits for at least one 40,000-square-foot store.
Schumann of Edward Jones said he wasn t surprised that Wal-Mart was already building the stores outside the
state. They have a fantastic infrastructure. When they do something, they do it big, and recently, they ve been
doing it well.
Jordan said Wal-Mart officials are listening carefully to customers during the testing of the Neighborhood Market
concept, but he wouldn t discuss what they ve learned so far.
He gave a few examples, however. Merchandise at the stores is being adapted to specific neighborhoods, he
said.
In one store, we went in and added more Hispanic-type merchandise, such as authentic Mexican food, Jordan
said. The Neighborhood Markets are being used as a learning platform, he said.
Wal-Mart observers expect the company to learn its lessons fast and turn the Neighborhood Markets concept
into a hit in its quest to dominate the grocery industry.
The probability of this being successful is 100 percent, said Barry of Merrill Lynch. If they can do it with the huge
Supercenters, they can do it with the smaller Markets.
Cutlines: Arkansas Democrat-Gazette/WILLIAM E. THOMPSON The Neighborhood Market in Bentonville,
across the street from Northwest Arkansas Community College, opened in October. About the same time,
Wal-Mart also opened trail Neighborhood Markets in Springdale, Fort Smith and Sherwood.
PAGE 17 Arkansas Democrat-Gazette/WILLIAM E. THOMPSON Neighborhood Market division cheif Henry
Jordan reviews operations with Debbie Grogan, an assistant manager at the Bentonville store. Jordan began
overseeing the Market division in May 1998, when plans for the new, smaller grocery stores began firming up.
PAGE 18 Arkansas Democrat-Gazette/JEREMY SCOTT In Springdale, the Harps grocery store directly across
the street from Wal-Mart's Neighborhood Market is fighting back against its rival. The two stores are locked in a
cost-cutting battle as the Neighborhood Market, open since last fall, tries to lure shoppers.
Arkansas Democrat-Gazette/KAREN VANDONGE Todd Sherron prepares for the opening of the Neighborhood
Market in Sherwood last fall by checking bar codes on snacks. The store is within two miles of three other
grocery stores, including a renovated Kroger, a brand new Harvest Foods and a locally owned IGA store.
PAGE 16 Map: Arkansas Democrat-Gazette/MATT JONES Wal-Mart Neighborhood Market locations PAGE 17
Graph: Arkansas Democrat-Gazette/MATT JONES Top 5 U.S. grocers @Page:E1 @Category:Features
@Date:6/1/99 @Headline: June Calendar Flags, fabric and folderol Miss Arkansas juggles her crown with a
tomato, a rose and a basketball.
@Byline:Ron Wolfe Arkansas Democrat-Gazette @Text: CORRECTION 060299 The Shakespeare Festival of
Arkansas' production of Romeo and Juliet has been canceled. It should not have been listed in the calendar of
June events in Tuesday's Style section. Romans named the month of June for Juno, their goddess of marriage,
and crazy combinations have been happening ever since. This rare month marries Hopalong Cassidy to frozen
yogurt, Miss Arkansas to Donald Duck, and Elvis to a Bradley County tomato. Reception follows.
1 National Fabric Care Month washes out -- eeeww! what is this? -- some kind of dribbly pink National Frozen
Yogurt Month. m Hot strings, hot sings, Hot Springs Music Festival through June 13. m Festival Chamber
Players' Got Schalk? at 7:30 tonight, St. Lukes Episcopal Church. Call (501) 623-4763. m Murry's Dinner
Playhouse builds a better Mousetrap through June 27. Call 562-3131.
2 The determined Ziolkowski family keeps chipping away at their Crazy Horse mountain carving in South
Dakota's Black Hills. This year is the 60th anniversary of when Lakota Chief Standing Bear asked sculptor
Korczak Ziolkowski to carve the 563-foot-high monument that so far shows the face of Crazy Horse but no
horse.
3 Eureka Springs' 10th annual Blues Festival wails into the sunset through June 6. Call (501) 253-5366. m O'
Shakespeare Festival of Arkansas' Romeo and Juliet, Romeo and Juliet, wherefore art thou? 7 p.m. nightly
through June 6 in MacArthur Park. Call 376-PLAY.
4 A walk on the Wildwood side: Grand Wildwood Festival Parade , 7:30 p.m. at Wildwood Park for the
Performing Arts. Month-long Wildwood Festival continues with events including T he Pirates of Penzance , Pete
Fountain jazz concert, zydeco street dance. Call 821-7275, ext. 232. m Solid Brass of Little Rock concerts, 7
tonight and June 5-6 at Wildwood Park, June 11-12 at the Old Statehouse Museum, June 27 at River Market
Pavilion. Call 666-0814. m Mena's Lum 'n' Abner doin's include quilt show in the middle school auditorium
through jot-'em-down June 5. Call (501) 394-6018.
5 TV cowboy William "Hopalong Cassidy" Boyd's birthday, 1895. Hoppy once sold 15 million comic books a
year, but he still watched his pennies. The price of Indians is way up. I used to get a whole tribe for practically
nothing. Now, they have a union. -- William Boyd East is East: Asian Festival , 11 a.m.-4 p.m. at Jacksonville
Community Center, call 918-2601. m Jefferson County Blues Fest with Marvin Sease, starts at noon at Cook
Park and Recreation Center north of Pine Bluff. Call (870) 534-9791. m Corps D'Arte art show and sale through
June 6 at University Mall. Call 225-1949.
6 National Headache -- ow! -- Awareness Day spills the aspirin down the sink.
7 Introduction of the world's first VCR, the $995 Sony Betamax, leads to world's first video late-return fee, 1975.
8 Frank Lloyd Wright's birthday, 1867. Cake proves structurally sound in harmonic design with ice cream and
candle accents.
9 Donald Duck's birthday, 1934. Sixty-five years old is one darn old duck.
10 World Pork Expo in Des Moines, Iowa: a pig on a mission.
11 Playing ketchup: 43rd annual Bradley County Pink Tomato Festival through June 12 in Warren. Call (870)
3 of 6 1/2/11 8:02 PM

226-5225. m Third annual International Butterfly Festival flits and flutters through June 13 on Mount Magazine
near Paris. Call (800) 980-8660. m Crossett Centennial celebration with gospel concert, 7 tonight in the Crossett
Auditorium; Arkansas Symphony Orchestra at 8 p.m. June 12 in the auditorium. Call (870) 364-6591.
12 Hoopfest: nothing but net through June 13 in the River Market District. Call 663-4667.
13 National Men's Health Week. We men are such two-fisted bruisers, We sneer at the awfulest pain; But give
us a hack Or a sneeze with a -- gak! And we're flopped on the sofa again.
Long may you wave your blankets and lawn chairs at the third annual Stars & Stripes Flag Day Celebration with
concert by Little Rock Wind Symphony on the grounds of the Decorative Arts Museum, starting at 6 p.m. Call
372-4000.
14 Flag Day. Run it up the flag pole, see who salutes.
15 Bubble-blower Tom Noddy burbles at the Museum of Discovery through June 19. Call 396-7050. m 41st
annual Antique Auto Show and Swap Meet beep-beeps through June 19 on Petit Jean Mountain near Morrilton.
Call (501) 727-5427. m Arkansas is the 25th state, 1836. Bears parade.
16 Crowning achievement: 38th annual Miss Arkansas Pageant through June 19 at Hot Springs Convention
Center. Call (501) 321-3506. m Smackover's 28th annual Oil Town Festival, goat roast and arm wrestling
through June 19. Call (870) 725-3521.
17 National Candy Month melts all gummy-gooey on the dashboard.
18 Movie critic Roger Ebert's 57th birthday. He called The Phantom Menace "an astonishing achievement," with
no Gene Siskel around to snap him out of it.
19 Arkansas Railroad Club show and sale, 9 a.m.-3 p.m. at Robinson Center. Call 225-0826 . m National
Juggling Day. What goes around, comes around.
20 Father's Day -- Dad's time to do nothing and see if anybody can tell the difference.
21 First hazy, lazy, crazy day of summer.
22 Stop and smell the National Rose Month.
23 National Carpenter Ant Awareness Week -- all over what's left of the shrubbery .
24 You deserve a brick today: Malvern's 19th annual Brickfest through June 26. Call (501) 865-2801.
25 Big Brother is watching George Orwell's birthday, 1903. Custer's last stand, 1876, but fans await the prequel.
26 Till we meet again: Emerson's 10th annual Purple Hull Pea Festival and World Championship Rotary Tiller
Race. Call (870) 547-2065.
27 National Descendants Day. Do you know where your children will be? m Arkansas Chamber Singers'
Summer Sing, sing-along concert at 3 p.m., Pulaski Heights United Methodist Church. Call 377-1121.
28 Full Moon. King Henry VIII's birthday , 1491. Coincidence? Tell it to the headsman.
29 Memphis names Elvis Presley Boulevard, 1971. Rejected names: Big Hunk O' Street, Burnin' Rubber
Boulevard, Return to Fender.
30 International Brotherhood of Magicians with nothing up their sleeves convention through July 3 at Arkansas'
Excelsior Hotel. Pick a workshop, pick a seminar, pick a magic act, don't show it to anybody. Call 455-6242.
Coming next month: July! Call 399-3633 or e-mail ron_wolfe@adg.ardemgaz.com by June 15 to suggest July
calendar entries or what to do about carpenter ants. Even worse -- those do-it-yourself home fix-it ants that start
all sorts of projects with their little hammers and their itsy-bitsy Time-Life books on kitchen remodeling and
building your own redwood deck, and then leave it all a mess. Raaaaaaaid!
Slug Line: junecal0601
This article was published on page BM16 of the Sunday, May 30, 1999 edition in the BM16 section.
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6 of 6 1/2/11 8:02 PM

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Section: A1
Glass resigns as Wal-Mart chief He sees 'it's time to make way'; Vice
Chairman Scott takes top spot
BENTONVILLE -- At 7:15 Friday morning at the weekly managers' meeting, David Glass, Rob Walton
and H. Lee Scott Jr. delivered the news that everyone knew was coming but didn't expect so
soon:Glass was resigning as chief executive, and Scott is Wal-Mart's new top executive.
Glass, 64, who helped Bentonville-based Wal-Mart Stores Inc. grow into the world's largest retailer during his
12-year tenure as chief executive, will take the helm at Wal-Mart's board of directors executive committee and
stay on full time for at least a year, the company said Friday.
Scott, 50, becomes Wal-Mart's third chief executive and president after 20 years of working his way up from his
first job in the logistics department. Before Scott, a native of Joplin, Mo., was named vice chairman and chief
operating officer a year ago, he was chief executive over the Wal-Mart Stores division, executive vice president
of merchandising and senior vice president of logistics.
Glass resigned now "because he was ready and he felt Lee Scott was ready for the job," said Wal-Mart
spokesman Jay Allen. "Glass has been saying for several years now that he didn't want to work as president
and CEO of Wal-Mart forever. He just feels like it's time for him to make way for the new guy."
At least some of Glass' plans for the future have nothing to do with retail: He's been chairman of the Kansas City
Royals board of directors since 1993, and he recently announced he will try to buy the team.
His resignation is not related to his activities with the Royals, Wal-Mart said.
The sale still has a long way to go and must be approved by the team's board and by Major League Baseball,
but Glass is the obvious favorite, said Soren Petro, a popular sports radio talk-show host in Kansas City.
"The feeling around here, all over Kansas City, is that [Glass' purchase of the team] is all but a done deal," Petro
said Friday. "He was handpicked by former owner Ewing Kauffman, who said he wanted Glass to own the team
after he died."
Scott, widely respected in the retail industry for his behind-the-scenes work on Wal-Mart's distribution and
logistics systems, is, like Glass, a quiet introspective type who listens first and decides later, several people who
know him said Friday.
George Billingsley, Sam Walton's former tennis partner and a longtime Wal-Mart investor, said Walton, who died
in 1992, would definitely be pleased with Friday's developments.
"Sam brought David Glass to this company, and David brought Lee Scott," said Billingsley, owner of
International Tours in Bentonville and chief executive of Pacific Resources Export Limited.
"Sam followed Mr. Scott's career and was very enthused about his future with Wal-Mart. He knew he had a
winner in Lee Scott."
For the past year, Scott has trained the top spot, working at Glass' side overseeing Wal-Mart's domestic stores,
international operations and Sam's Club division.
If Glass' reputation and background is any indication, Scott has learned a lot during the last year.
In 1964, Wal-Mart founder Sam Walton heard about a financial wiz named David Glass working at a drugstore
chain in Missouri. Walton started wooing Glass -- he would do so for 12 more years before snagging him -- and
invited Glass to the grand opening celebration at the second Wal-Mart store, in Harrison.
It was a disaster.
"It was the worst retail store I had ever seen," Glass wrote later in contributing to Walton's autobiography, Made
In America . "It was about 115 degrees, and the watermelons began to pop, and the donkeys began to do what
donkeys do, and it all mixed together and ran all over the parking lot."
Inside, Glass wrote, the mess was just as bad; people had tracked the mixture of donkey droppings and
watermelon all over the floor.
"I wrote him off," Glass recalled. "It was just terrible."
1 of 3 1/2/11 7:41 PM

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But 12 years later, Glass was persuaded in a bidding war to leave his job as general manager of a regional
Missouri grocery chain, and he became executive vice president for finance and distribution, then the No. 4 spot
at Wal-Mart.
Before long, an obvious rivalry developed between Glass -- a favorite of Walton's -- and Jack Shewmaker, the
No. 3 executive.
Both Glass and Shewmaker were believers in technology. Both encouraged Walton to invest heavily in computer
systems that later would prove key to making Wal-Mart the world's top retailer.
Shewmaker, referred to by some insiders as brash and headstrong, was highly regarded by Wall Street and the
retail industry. As president, he often staked out the more visible positions while Glass, the more quiet, analytical
of the two, focused on the underpinnings of the company.
Then, in 1984, Walton shocked both the men by telling them they were switching jobs: Glass would be
president, and Shewmaker would be chief financial officer.
Shewmaker, although he was wooed by several rival retailers, stayed with Wal-Mart despite his obvious
disappointment at being replaced in the important line of succession.
And Glass worked harder than ever, with employees at every level within the company, to prove his worthiness
of the promotion.
His hard work paid off eventually, but first it bit back -- with a heart attack, in 1985. He refused a suggested
bypass operation and instead opted to rest, take medication, improve his diet and exercise. Within weeks, he
was back at work, putting in more hours than ever.
Three years later, almost to the day, Walton made him chief executive officer. That same day, Wal-Mart
announced that Shewmaker was retiring to pursue other interests, such as his Bentonville cattle ranch.
Since then, Wal-Mart has undergone enormous growth. Sales under Glass have soared -- nearly 1,000 percent
-- to an estimated $165 billion this fiscal year, which ends Jan. 31.
More than anything, though, Glass is credited with ensuring the development of Wal-Mart's backbone, its
technology systems that run its enormous distribution system from purchases to stocking to sales to reordering.
(That work started early. In 1976, he supervised the construction of a satellite network that enabled stores to
communicate with the central office -- long before intranets or the Internet were commonplace. He also
computerized the company's distribution systems, which he found to be "shockingly" antiquated in 1978.)
Immediately after Glass took charge, Wal-Mart introduced a new kind of store, a really big one. The first
Wal-Mart Supercenter opened in Washington, Mo., as a test, and a few more followed over the next few years
as the company made adjustments to the concept.
In 1992, Walton died. The next year, Wal-Mart shares began to drop -- from $34.13 just after a stock split to
under $20 two years later in 1995.
To help increase sales and drive the stock price back up, Glass pushed hard for the national expansion of the
supercenters. Glass also looked at international expansion. He set a long-term goal of $300 billion a year in
sales.
Wal-Mart already had a handful of stores in Mexico under a joint venture agreement, as well as 15 stores in
Puerto Rico.
But in 1994, the nation's largest retailer began its transformation into the largest in the world. Between 1994 and
1999, Glass led Wal-Mart into six new countries and buy a majority interest in its Mexican operations, Cifra SA,
its largest international chain to date.
The most recent acquisition, completed in July, was likely Glass' most important contribution to Wal-Mart
International: By buying United Kingdom retailer Asda Group Plc, the company more than doubled its
international division's annual revenue and secured a home base for future expansion in Europe, home to the
world's largest retail markets.
"David Glass will certainly be viewed as one of the best CEOs of this century," said Wal-Mart spokesman Allen.
Now that he's resigned as Wal-Mart's head, Glass will stick around for at least a year and will run the top
committee of Wal-Mart's board of directors; the committee acts on behalf of the board between meetings.
Wal-Mart officials declined to say whether Glass' pay -- which last year was nearly $10 million -- would change.
Last year Glass announced his intention to try to buy the Kansas City Royals.
He's long been involved with the team and was a lifelong friend of now-deceased former owner, Kauffman.
The auction for the team hasn't even officially opened yet, but word around Kansas City is that Glass is the
favorite. The only other person who's come forward as a possible buyer is New York businessman Miles
Prentice, whose bid to buy the team last year was rejected by Major League Baseball.
"People here really want Glass to get the team," said talk-show host Petro in Kansas City. "I mean, he's worked
with the guys on the board for years, and some on the board aren't sure about some of the investors in
Prentice's group.
"[The fans] are comfortable with Glass, and other owners in Major League Baseball have said the same thing."
According to protocol, bidding for the team and approval could take at least another year to complete.
"He wants the system to move faster," Allen said. "He's impatient for it to move along."
Graph: Arkansas Democrat-Gazette/GREG MOODY SOURCE: Bloomberg Business News Wal-Mart under
David Glass Map: Arkansas Democrat-Gazette SOURCE: Wal-Mart Stores, Inc.
Research: Sarah L. Courteau Wal-Mart's worldwide locations Photo: David Glass Slug Line: bwalmartglass15
1A, w/art
This article was published on page A1 of the Saturday, January 15, 2000 edition in the A1 section.
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3 of 3 1/2/11 7:41 PM

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Page(s): D1
Section: D1
Sales in January for Wal-Mart, Dillard's modest
BENTONVILLE -- Arkansas' two largest retailers turned in less-than-stellar January sales results on
Thursday as the industry posted "shockingly great" increases and topped off its best year since 1984.
In the four weeks ended Jan. 28, Bentonville-based Wal-Mart Stores Inc. sold 4.1 percent more than last
January at stores open at least a year, a figure at the top end of expectations but lower than the national
average, which was 5.4 percent.
It was the first month since June that Wal-Mart's increase was lower than the industry average.
Dillard's Inc., the nation's No. 3 department store chain, continued to struggle as it turned in a 1 percent rise in
same-store sales for January. For the fiscal year ending Jan. 31, Dillard's same-store sales increased 3 percent.
Industrywide, many retailers said their January sales were better than expected, leading Wall Street analysts to
raise some fourth-quarter earnings estimates.
"Retail sales were shockingly great, and that's surprising because of the cold and snow at the end of the month
should have kept people at home," said Kurt Barnard, who runs Barnard's Retail Trend Report , a New Jersey
consulting firm.
The Bank of Tokyo-Mitsubishi retail sales index, which tracks sales at about 80 chains, rose 5.4 percent in
January based on a preliminary estimate, considerably higher than the 4 percent gain forecast. Sales from
stores open at least a year, known as same-store sales, are considered the most accurate measure of a
retailer's business.
January's robust gains cap a very strong 12 months for retailers, whose fiscal year runs from February to
January. The Bank of Tokyo's index rose 6.5 percent for the year, the biggest gain since 1984.
Wal-Mart, the world's largest retailer, said revenue during January totaled $11.6 billion, up 23 percent from last
January's $9.5 billion. For the fiscal year ended Jan. 31, Wal-Mart's sales hit a record $164.8 billion, 20 percent
more than the previous year.
Wal-Mart's January sales results were pulled down by its Sam's Club division, which was hurt by bad winter
weather and the "2000 pantry effect," said spokesman Mike Maher.
After many customers stocked up on staples in December to prepare for possible problems when the date rolled
over to 2000, purchases in January dropped. Also, about 10 percent of the company's 463 U.S. Sam's Clubs
were forced to close for at least a day because of winter storms pounding the nation during January, especially
on the East Coast.
Sam's Club warehouse stores open at least a year sold 1.9 percent less than last January, when it posted an 8.7
percent increase. January's numbers also were affected by an accounting period one day shorter than normal,
Maher said.
The Wal-Mart Stores division, which does not include Sam's Club stores, posted a same-store increase of 5.7
percent in January, higher than the industry average but far less than last January's 10.8 percent rise.
Shares of Wal-Mart, which has 3,978 stores in the U.S. and nine other countries, were unchanged on Thursday,
closing at $58.38 on the New York Stock Exchange.
Dillard's, the nation's No. 3 department store chain with 342 stores, said its sales in January were $472.2 million,
up slightly from $469.1 million last January. For the fiscal year ended Jan. 31, sales were up 12 percent to $8.7
billion, from $7.8 billion the previous fiscal year.
Analysts said part of Dillard's problem could be lingering difficulties from Dillard's acquisition in 1998 of
Mercantile department stores.
"It's usually a clearance month, selling what didn't sell during December," said Karen Sack of Standard & Poor's
in New York. "Dillard's [January same-store] numbers aren't great, but it's not that big a deal."
Dillard's shares closed Thursday at $19.75, up 38 cents, on the New York Stock Exchange.
Gap Inc., the nation's second-largest clothing chain, led the industry in January, reporting an 11 percent increase
1 of 2 1/2/11 7:38 PM

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reserved.
in same-store sales.
Other retailers with positive results were: Sears Roebuck & Co. said same-store sales rose 1.7 percent.
Kmart Corp., the No. 2 discount chain behind Wal-Mart, said same-store sales were up 3.6 percent.
Target Corp., formerly known as Dayton Hudson, said same-store sales rose 5.7 percent. Its Target discount
stores rose 6.4 percent, while sales at its department stores fell 0.3 percent.
Limited Inc. said same-store sales were up 9 percent.
At J.C. Penney Co. Inc., same-store department store sales were up 6.1 percent; same-store sales at Eckerd
drugstores were up 5.2 percent. Information for this article was contributed by The Associated Press.
Slug Line: bretail04 1d statecity
This article was published on page D1 of the Friday, February 04, 2000 edition in the D1 section.
2 of 2 1/2/11 7:38 PM

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Page(s): A1
Section: A1
Union chief sees Texas vote turning tide at Wal-Mart
*NW EDITION* Brad L. Edwards is convinced: The walls of Jericho are beginning to crumble.
For nearly two years, Edwards and his fellow regional directors at the United Food and Commercial Workers
International Union have been marching around the corporate walls of Wal-Mart Stores Inc., trying to crack into
the largest retailer in the world.
Like a giant swatting at a mosquito, Wal-Mart has swept away the union's attempts to unionize meat cutters --
until last month.
On Feb. 17, Edwards saw his hard work come to fruition when the 11-person meat department at a Jacksonville,
Texas, Wal-Mart Supercenter voted to join his union and became the first U.S. Wal-Mart employees to do so.
And meat workers at another Texas store have filed a petition to have their own vote.
Now with Wal-Mart moving to close the meat-cutting departments in Texas and five other states, those Texas
workers will speak out publicly on Monday, along with national and local labor leaders, at a rally in Tyler, Texas.
As Edwards sees it, it's the beginning of the end of Wal-Mart's union shutout. Since Wal-Mart's announcement,
inquiries from the retailer's employees have soared into the hundreds, he said.
"All those cheers and chants that Wal-Mart employees have to do every day are backfiring," Edwards said on
Friday. "Now, after seeing the union vote in Texas, Wal-Mart employees across the nation are chanting 'If they
can do, so can we.' "
Despite appealing the election results to the National Labor Relations Board, Wal-Mart maintains that its
decision to close meat-cutting departments in Texas, Arkansas, Louisiana, Missouri, Oklahoma and Kansas has
nothing to do with the union vote in Jacksonville.
After a year-long test program at its Northwest Arkansas stores, the world's largest retailer is switching to
prepackaged, or "case-ready," meat at 180 supercenters and Neighborhood Markets in those states.
Case-ready meat looks neater, saves money and gets the meat to the consumer more quickly, according to the
American Meat Institute, an trade organization.
According to institute spokesman Patricia Pines, case-ready meat is a growing trend in food retailing, and every
one of the nation's top 50 grocers is testing it or has already switched over.
Still, the timing of Wal-Mart's announcement angered union officials, who say the retailer feels threatened by the
growing interest among its work force.
Wal-Mart says it doesn't see it that way at all.
"They have seven out of 915,000 U.S. associates who have shown interest in unionizing," said Wal-Mart
spokesman Jessica Moser. "Wal-Mart associates have achieved unprecedented results in the last 30 years, and
there's no way they could have done that if they weren't excited about their jobs and weren't being rewarded."
Maurice Miller, the Wal-Mart meat cutter in Jacksonville who organized the union vote last month, said he's tired
of paying too much for health benefits and bringing home too little pay. He won't be attending Monday's rally
because he underwent back surgery on Feb. 25 and is still recovering.
But he's hopeful that the rally will help draw attention to the cause.
In October, Miller learned that meat cutters at the Kroger down the street from his Wal-Mart were making much
more than him. At Kroger, the average union butcher makes around $13 an hour; at Wal-Mart, it's less than $10.
He says he approached his supervisor about a raise, but was told "Wal-Mart couldn't pay meat cutters that kind
of money."
So he called Edwards, the regional director for the UFCW, and started talking to his co-workers about
organizing.
"They were all scared to discuss it at first, worried about losing their jobs," Miller said. "We haven't received any
real threats, but they started treating us differently, giving us the cold shoulder."
A few days after the vote, Miller recalled, he and another meat cutter walked into an empty break room and
1 of 2 1/2/11 7:37 PM

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reserved.
found that day's newspaper lying on the table. The front page had a picture of Miller with the story about the
vote, and someone had scrawled the words "Not Wanted Dead or Alive" across Miller's picture.
Despite the chilly atmosphere, however, Miller says he doesn't hate his employer.
"I just want a decent salary, and I want to go back to cutting meat at Wal-Mart."
Slug Line: bwalmartunion11 NEW HED ONLY 1A NW
This article was published on page A1 of the Saturday, March 11, 2000 edition in the A1 section.
2 of 2 1/2/11 7:37 PM

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Page(s): A1
Section: A1
Wal-Mart hopes to head off union threat Retailer goes on offensive,
promises new meat program won't cut jobs, pay
*NW EDITION* BENTONVILLE -- With five of its stores now showing interest in organizing, Wal-Mart
Stores Inc. went on the offensive over the weekend.
Executive Vice President Tom Coughlin wrote to the retailer's 915,000 U.S. employees on Friday, promising that
Wal-Mart's new prepackaged meat program will not affect any associates' jobs or pay levels.
"Do not be misled by claims made by union organizers," Coughlin wrote in the letter. "They are only interested in
you paying them to represent you."
At issue is Wal-Mart's plans to switch to selling only prepackaged, or "case ready," meat at its 180 Supercenters
and Neighborhood Markets in Arkansas, Texas, Oklahoma, Missouri, Louisiana and Kansas.
The Bentonville-based retailer announced the move about two weeks after meat cutters in its Jacksonville,
Texas, Supercenter voted to join the United Food and Commercial Workers International Union.
It was the first time any U.S. Wal-Mart employees had successfully organized .
And it apparently is catching on, especially since Wal-Mart's case-ready announcement.
Since the symbolic Jacksonville vote five weeks ago, four other stores' meat departments have filed petitions
with the National Labor Relations Board, asking to hold their own elections on whether to unionize. Those stores
are in Ocala, Fla., Normal, Ill., Palestine, Texas, and Abilene, Texas.
In addition, union officials report that "hundreds" of Wal-Mart workers across the nation have contacted them in
recent weeks, and that at least four more stores will petition for union votes in the near future.
Five meat departments averaging about 10 employees each may not seem like a lot to worry about, since
Wal-Mart has nearly a million associates and nearly 3,000 stores in the United States alone.
But the retailer isn't taking the threat of unionizing lightly.
Government statistics show that union workers make about $2 more per hour than their nonunion counterparts.
Meat cutters at the Palestine, Texas, Wal-Mart average about $10 an hour; at the organized Kroger down the
street, the meat cutters get about $13 an hour.
But besides higher pay, union workers get something else, something that could make any large employer
shiver -- a contract.
When employees are part of a union and work under a contract, the employer usually has to tread carefully
when making changes -- like deciding to save money by switching to case-ready meat.
So it's no wonder that Wal-Mart is reaching out to touch its employees with a letter from the top, says Kathleen
Hessert, president of Communication Concepts, a crisis-control consultancy in Charlotte, N.C.
"Wal-Mart can't wait until more stores unionize to take this threat seriously," Hessert said. "They have to get their
side of the story out to their associates now, and communicating directly is the best way to do that."
Meanwhile, Wal-Mart is fighting the union tooth and nail in the five stores where it has established a foothold.
In Jacksonville, where the meat cutters voted "Yes" on organizing, Wal-Mart is objecting to the outcome over
alleged "inappropriate conduct" on the part of union recruiters and officials. Before the vote, a union official took
meat cutters to strip bars, gave them alcohol and spending money and promised them paid positions in the
union, said Wal-Mart spokesman Jessica Moser.
Union officials deny wrongdoing; a National Labor Relations Board review judge will hear the case next week.
Also next week, Wal-Mart will ask the labor board to decline the Ocala meat department's request to hold an
election. The retailer lost similar arguments over elections in Jacksonville and Palestine.
But even if the stores all get to hold elections, and they all vote to organize, the outcome is still questionable.
Wal-Mart says it is under no obligation to bargain with the Jacksonville employees, or any others who vote to
unionize, because the company already was planning to do away with meat-cutting, which would nullify the
"unit" that held the election.
1 of 2 1/2/11 7:34 PM

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reserved.
But last week, in approving Palestine's vote, a regional labor board review showed strong disdain for that
argument.
"The evidence does not support" Wal-Mart's claim that it has reached a final agreement with its supplier to begin
a full case-ready meat program, the labor board wrote in its ruling. Furthermore, "mere speculation as to the
uncertainty of future operations is not sufficient to dismiss a petition or decline to hold an election."
According to the National Labor Relations Act, an employer cannot do things -- like restructure meat
departments or do away with certain positions -- for the purpose of interfering with employees' right to organize.
Nor can employers discriminate against employees who do organize.
So the legitimacy of the meat cutters' votes to organize will rest on one factor -- whether Wal-Mart announced its
case-ready plans early enough to prevent any further organization efforts.
Wal-Mart says the two events are completely separate. It has, in fact, been testing its all-case-ready program in
several stores for a year, as its Northwest Arkansas rival Harps Food Stores will attest.
Nevertheless, the labor board's review over the Palestine case may not bode well for Wal-Mart's attempts to
stop the union in its tracks.
"It all depends on whether the NLRB, and thereafter the federal courts, conclude that what Wal-Mart did was
motivated by the union activities of its employees or fear that other employees would organize," said Bob Funk,
chief counsel for the United Food and Commercial Workers International Union. "That will be the determining
factor for whether any of these votes even matter."
Slug Line: Bwalmart21 1A NW w/btext jump
This article was published on page A1 of the Tuesday, March 21, 2000 edition in the A1 section.
2 of 2 1/2/11 7:34 PM

Wal-Mart's Strategy to Control Product Lines

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