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Wal-Mart unveils economic-impact study Saturday, Nov 5, 2005 By Alison Vekshin Stephens Washington Bureau WASHINGTON -- Wal-Mart Stores, Inc., went on the offense against its critics Friday, releasing a report showing the world's largest retailer creates jobs and boosts wages. The Bentonville-based company held a conference in Washington to unveil the results of a nine-month study detailing its economic impact. "Wal-Mart does more for the average American, the average household, the average community than any company in America," said Ray Bracy, Wal-Mart's vice president of federal and international public affairs. "We find ourselves often in positions where there have been studies done about Wal-Mart in the past," Bracy said. "The conclusions, not surprisingly, have been not all the same, they have been mixed," he said. The study was conducted by an 18-member research team organized by Global Insight, Inc., a Massachusetts-based, economic-research company. Wal-Mart provided researchers full access to its company data, including information about payroll, pricing, sales and supplier transactions. Wal-Mart provides annual savings of $2,329 to families and $895 to individuals, the analysts found. Chris Holling, Global Insight's executive managing director, presented the report's conclusions to a hotel conference room filled with economists and analysts. "Wal-Mart has been economically positive for the U.S. economy, and it's largely through this mechanism of lower prices," he said. One academic at the conference expressed doubts about the study's methodology. "I think it's a nice, good effort, but some of the analysis is not valid to what they studied," said Vishal Singh, assistant professor of marketing at the Graduate School of Industrial Administration at Carnegie Mellon University in Pennsylvania. "They ignored the competition," he said. "But competition has to come into play, in the late 80s and 90s certainly, looking at what Kmart is doing or what Target is doing when making the location decisions." Holling said the retailer created 210,000 jobs last year. "When Wal-Mart moves into a county there is higher overall retail employment, but, yes, there is disruption in the retail sector," he said. "Wal-Mart does displace other employment." Disposable income is 0.9 percent higher than it would be if Wal-Mart did not exist, according to the report. The researchers also concluded that Wal-Mart has contributed to lower prices. Savings to consumers were generated as a result of the retailer's higher levels of investment in distribution and inventory control, lower import prices and greater efficiency in its supply chain. The researchers did not look at Wal-Mart's wages, benefits and work conditions relative to "a fair and comparable benchmark," according to the report. Still, Holling said they found no evidence of Wal-Mart paying its employees below-market wages. One Wal-Mart critic questioned the findings. "I don't think that a lot of their assumptions are very sound," said Tracy Sefl, spokeswoman for Wal-Mart Watch, a nonprofit group that challenges the retailer's business practices. Sefl said she went to the meeting but was escorted out. "It seems like a very well-staged public-relations attempt," she said. "The company is reeling right now from an endless barrage of bad headlines." Bracy said the effort was not a public-relations campaign, but a self-assessment of the company. He added that it was too early to say whether Wal-Mart would make changes as a result. Bracy said the study would be shared with the public "for us to be able to talk about what we think our impact is." He defended the Wal-Mart-commissioned study, saying the research company has integrity and an important name. "You cannot buy their results," he said. "They have too much at stake." E-mail: avekshin@stephensmedia.com -- 30 -- |
