Walmart is dealing with different problems and blunders in its international expansion. The nation’s largest private employer faces challenges in every sector of the environment. Recently the corporation that had been entirely nonunion was jolted by a victory of organized labor on their premises. February 17, 2000 brought the United Food & Commercial Workers union to triumph in the first union election at a U. S. Walmart store.
Although it initially involved only eleven meat cutters in Jacksonville, Texas, and the company challenged the election results, the impact of the external human resources sector is being felt within the organization. The weight on Walmart’s bottom line could be significant over time because currently Walmart pays an average $9. 63 an hour, or 47% less than at unionized grocery chains. Other elections may follow, at the same time additional effects from the environment are felt.
For example, the previous year, the same union began scoring victories in the political environment against Walmart superstores by working with other unions, urban-sprawl opponents, and even other grocery stores; initiatives were for passing bills such as the one in California prohibiting new retail stores larger than 100,000 square feet from using more than 15,000 square feet for non-taxable items such as groceries.
Not all such efforts are immediately successful; for example, the bill passed by California’s legislature was later vetoed by the governor. Nevertheless, the impact of the general environment on the giant retailer is clear, and the potential effect is huge. Walmart’s 720 superstores already account for 27% of revenue, and with 300 more superstores scheduled to open in two years, the company knows it must pay close attention to its environment.
Up Against the Walmart: Labor, antisprawl activists, and grocery rivals link hands to battle the retail giant by Wendy Zellner and Aaron Bernstein. Business Week, March 13, 2000, pp. 76-78.