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Walmart's Black Friday strike could be Amazon's gain

Walmart's Black Friday strike could be Amazon's gain

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Walmart DTD 555
Walmart DTD 555

Black Friday has traditionally been the biggest shopping day of the year for most US retailers, but it's shaping up to be an uphill battle for Walmart, thanks to a surge in employee discontent. Workers at the retail giant began going on strike this week, as part of a nationwide protest against low wages, high healthcare premiums, and poor working conditions. Demonstrations are being coordinated by a coalition called Making Change at Walmart, and are scheduled to culminate on November 23rd, potentially dealing a major blow to Walmart's Black Friday sales — and perhaps giving a boost to online competitors like Amazon.

Discontent began bubbling to the surface in October, when workers went on strike at an outlet in Los Angeles. That demonstration set off a chain reaction at 28 stores across 12 states, with the movement intensifying in recent days. On Wednesday, dozens of workers at a Southern California distribution warehouse walked off the job, followed by 30 Seattle-area employees on Thursday. Additional protests are planned at 1,000 different stores across Chicago, Dallas, Miami, Oklahoma, Louisiana, Milwaukee, Los Angeles, Minnesota, and Washington, D.C.

For Walmart, the timing couldn't be worse

Making matters worse for Walmart is the fact that its Black Friday sale starts even earlier this year, with the company opening its doors at 8 pm on Thanksgiving night. Although industry-wide sales projections are comparatively modest this year — largely due to difficult economic conditions — Walmart remains optimistic about its strategy. In a statement announcing Walmart's Q3 earnings on Thursday, president and CEO Bill Simon said he expects "strong performance through Thanksgiving weekend," describing his company's plans as "innovative and designed to drive additional traffic in our stores."

The question, then, is whether there will be enough employees on staff to handle this traffic. And at a time when consumers are doing their holiday shopping online in increasing numbers, it's not hard to see why a nationwide strike would be cause for concern. According to a 2011 comScore report, Black Friday online sales totaled more than $800 million last year, marking a 26 percent increase over the previous year. Amazon once again led the pack among online vendors, garnering 50 percent more traffic than any other competitor, with overall traffic to web retailers increasing by 35 percent. finished second in comScore's survey, though it did experience some difficulties. Last year, the retailer's site crashed under the weight of Black Friday traffic, as shootings and assaults broke out at some physical stores. That might be a factor in scaring off employees as well. The looming specter of work stoppage this year may only heighten consumer concerns — both online and in stores — and may open the door for Amazon to reap the benefits.

New web strategy brings shift in tone

This week's protests come more than a month after Walmart unveiled a new corporate strategy, disclosing web sales targets for the first time since it began selling products online in 2000. At an annual analyst meeting, company executives said they are aiming for $9 billion in global internet sales by 2014, and detailed plans to drive sales through enhanced engagement on social media. These statements mark a notable shift in Walmart's tenor, coming just a few months after the company lobbied members of Congress in support of a state sales tax on e-commerce — a move aimed squarely at Amazon.

Plans of online expansion aside, of more immediate concern is next week's sale, and whether worker walk-outs will be widespread enough to make a dent in Walmart's bottom line. The company is certainly no stranger to worker strife over low wages, having engaged in controversial battles with pro-union groups dating back to 2005, though never before has it faced this kind of upheaval on such a critical day of the year.

"I work full-time for one of the richest companies in the world, and my kids get state health insurance and are on food stamps."

Organizers acknowledge they won't be able to impact all of Walmart's 4,000 US stores, but they hope to raise awareness through an aggressive online campaign. Making Change at Walmart currently boasts more than 27,000 fans on Facebook, and has set up an online donation campaign where supporters can sponsor protesters to help compensate for the wages they lose while on strike. The group is also backed by the United Food and Commercial Workers (UCFW) union and OUR Walmart, which created a Facebook app that allows users to spread the cause among friends who work, or have worked at Walmart.

During a conference call with reporters Tuesday, employees vented some of their frustration with what they see as a decidedly one-sided relationship. "I work full-time for one of the richest companies in the world, and my kids get state health insurance and are on food stamps," said Sarah Gilbert, manager of a Walmart store in Seattle. With a workforce of more than 1.4 million, Walmart remains the largest private employer in the US, and this month reported quarterly profits of $3.6 billion. The company says its full-time workers make an average of $12.40 per hour, though it has been reluctant to disclose wages for part-time workers.

"Just another exaggerated publicity campaign."

In an email to The Verge, company spokesman Kory Lundberg dismissed the strikes as "just another exaggerated publicity campaign" designed to create misleading headlines. Lundberg also said he's not worried about being understaffed. "We’ll have more than one million associates working throughout the holiday weekend and they’re excited about our Black Friday plans this year," Lundberg said.

"The fact is, these ongoing tactics being orchestrated by the UFCW are unlawful and we will act to protect our associates and customers from this ongoing illegal conduct," the spokesman added.

Protesters, meanwhile, say they're only looking for improved conditions and fair pay, and have no interest in shaming the company on its biggest retail day of the year. On Tuesday, Texas-based employee Colby Harris told reporters that this week's demonstrations should remind Walmart that its corporate success ultimately hinges upon the well-being of its workforce. "Wal-Mart needs to know," Harris said, "that if we didn’t want to work with them, we would have quit."