Hot on the heels of my last post, I read a fantastic article about Target and how it is, or is not, similar to Wal*Mart. The article is well written and provides an excellent overview for anyone interested in reading more about the two companies: Target: Wal-Mart Lite.

The article begins with a discussion of how the two companies, despite their apparent surface differences, are quite similar:

“In contrast to [Target's higher-end] image, however, critics say that in terms of wages and benefits, working conditions, sweatshop-style foreign suppliers, and effects on local retail communities, big box Target stores are very much like Wal-Mart, just in a prettier package.

“Of more than 1,400 Target stores employing more than 300,000 people nationwide, not one has a union. Employees at various stores say an anti-union message and video is part of the new-employee orientation. At stores in the Twin Cities, where Target is headquartered, the United Food and Commercial Workers (UFCW) union Local 789 has been trying for several years to help Target employees organize, with little luck.”

An interesting point of fact that the article brought up deals with the reality of the garment industry. Whether you feel passionately about sweat shop labor or not, it is hard to dispute the following statement:

“‘The way the global garment industry is, there are so few factories that respect workers’ rights that there is no way Target gets its clothes from workplaces where workers’ rights are being respected,’ said Allie Robbins, national organizer of the group United Students Against Sweatshops.”

The first portion of the statement is what really stuck in my mind. Whether or not I think worker’s rights are important, the reality of the global garment manufacturing industry is so widespread and commonplace, that it truly is difficult for a company of Target’s size to find a supplier that isn’t doing something questionable. However, and this is what frustrates me most, the situation is largely being perpetuated by the Targets and Wal*Marts of the world (and the consumers that gobble up cheap goods, but I digress…). Imagine if the 100 largest retailers in the world suddenly decided not to tolerate sweat shop labor, poor working conditions, environmental destruction, or a host of other issues. Do you think they could promote change through such action?

“Target doesn’t differ from most major clothing vendors; you usually have to seek out small specialty companies to find union-made, American-made textiles. But as one of the country’s major retailers, Target is an industry leader, fostering and profiting from the U.S.’s general culture of consumerism: We buy, buy, buy at ever lower prices in a market system sustained by very low-paid, non-union workforces in impoverished countries.”

The article also raises an interesting point about the negative impact anti-Wal*Mart efforts have had. In short, as public criticism of Wal*Mart has grown and started to impact what the company does, Target (and presumably, similar companies) have quietly slipped into the resulting vacancies:

“That is what happened last fall in West St. Paul, Minn. [Wal*Mart being opposed while Target was welcomed], where a new Target reaped $731,000 in local tax breaks, while 30 miles away, Ham Lake was fighting Wal-Mart’s efforts to open a superstore. The Target in downtown Minneapolis received $68 million in public subsidies, according to the Star Tribune newspaper. In Chicago in 2004, a city-wide coalition formed to oppose two proposed Wal-Marts and the fight roiled the city council for months. Meanwhile at least three new Target stores have been built in the metro area in the last several years.”

The article does have some positive things to present about Target, namely that the company seems more charity and community-focused than Wal*Mart:

“Target does more proportionately for the community in the form of community grants and charity than Wal-Mart does, and spends considerably less boating about it. According to the company website, which says Target donates more than $2 million a week to local and national non-profit organizations. The company gives grants of $1,000 to $3,000 to community organizations, and shoppers can donate 1 percent of Target REDcard charges to a local school. The website says more than $154 million has been donated to schools since 1997. The company also runs Target House, a luxury residential facility in Memphis where families can stay while their seriously ill children are treated at a nearby medical center.

“In comparison, Wal-Mart, with revenue of $288 billion in 2005, donated $200 million (or 7/100ths of a percent) to charities and organizations in 2005, according to its web site.”

And finally, if you think there is no hope for large retailers, the article notes that at least one exists with an interest in doing the right thing:

“Even other major big box retailers have managed to pay significantly higher wages and achieve higher employee retention. The prices at Costco Wholesale Corp., the nation’s fifth largest retailer, are competitive with those at Target and Wal-Mart, but it pays full-time employees an average of around $16 an hour along with generous health benefits….Costco pulls this off by offering fewer brands of each item, keeping infrastructure costs low and forgoing advertising; and the company also benefits financially from low employee turnover.”

TAGS: Target | Wal*Mart | Costco

This entry was posted on Saturday, May 6th, 2006 at 9:22 am and is filed under Business Ethics, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.