RIVAL CHAINS SECRETLY FUND OPPOSITION TO WAL-MART

June 8, 2010

As Wal-Mart Stores Inc. has grown into the largest grocery seller in the United States, local activists and union groups have been the public face of much of the resistance.  But in scores of cases, large supermarket chains including Supervalu Inc., Safeway Inc. and Ahold NV have retained Saint Consulting to block Wal-Mart, according to hundreds of pages of Saint documents reviewed by the Wall Street Journal and interviews with former employees. 

Saint has jokingly called its staff the "Wal-Mart killers."  P. Michael Saint, the company's founder, declines to discuss specific clients or campaigns.  When read a partial list of the company's supermarket clients, he responds that "if those names are true, I would say I was proud that some of the largest, most sophisticated companies were so pleased with our success and discretion that they hired us over the years." 

Supermarkets that have funded campaigns to stop Wal-Mart are concerned about having to match the retailing giant's low prices lest they lose market share: 

  • Although they have managed to stop some projects, they haven't put much of a dent in Wal-Mart's growth in the United States, where it has more than 2,700 supercenters -- large stores that sell groceries and general merchandise.
  • Last year, 51 percent of Wal-Mart's $258 billion in U.S. revenue came from grocery sales.  

In many cases, the pitched battles have more than doubled the amount of time it takes Wal-Mart to open a store, says a person close to the company.  And the fights generate negative publicity for the retailer: 

  • In Mundelein, a town of 35,000 about 20 miles northwest of Chicago, it was Supervalu, a national grocer based in Eden Prairie, Minn., that hired Saint to work behind the scenes, according to Saint documents.
  • Supervalu's objective was to block Wal-Mart from competing with its nine Jewel-Osco supermarkets located within three to 10 miles of the proposed shopping center, the documents indicate.
  • City officials say the effort stalled the development for three years and cost Mundelein millions in lost property and sales taxes. 

Source: Ann Zimmerman, "Rival Chains Secretly Fund Opposition to Wal-Mart," Wall Street Journal, June 7, 2010. 

For text:

http://online.wsj.com/article/SB10001424052748704875604575280414218878150.html

 

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