Wal-Mart (NYSE:WMT) seems to be the company many people love to hate. But the latest criticism leveled against it may go a bit too far.
I'm not a Wal-Mart basher, though -- at least, not exclusively. I've written both positively and negatively about the company. The Bentonville behemoth is so often reviled that it can make you think that all other companies are noble and faultless. Not true. The folks at environmental consultancy ECOFACT recently listed the 10 "Most Controversial Companies" (decried because of "issues including human rights abuses, severe environmental violations, corruption and bribery, and breaches of labor, health and safety standards"). The list included Wal-Mart, of course, but also:
- Samsung
- Total (NYSE:TOT)
- China National Petroleum Corp. (CNPC), parent of PetroChina
- Royal Dutch Shell
- ExxonMobil
- Citigroup (NYSE:C)
- Nestle
- ArcelorMittal (NYSE:MT)
- Chevron (NYSE:CVX)
See. Lots of companies allegedly have trouble doing the right thing.
Is it overkill?
I think it's fair to question whether Wal-Mart can do better by its employees, and whether it's squeezing its suppliers too tightly. But I just received an email from the retailer's critics at walmartwatch.com, expressing outrage that the company is expanding with "stealth" by opening a new chain of modestly sized convenience stores, named "Marketside."
To me, this criticism is overkill. Why shouldn't Wal-Mart be able to launch a new chain of stores without using the Wal-Mart name? Lots of companies encompass many brands. T Yum! Brands has Taco Bell, Pizza Hut, and KFC units. Gap (NYSE:GPS) runs Old Navy and Banana Republic, along with its flagship Gap stores.
Also, consider that Wal-Mart serves more than just its customers. As a public company, it serves its shareholders, too, and they'd like to see a growing company. Once you're raking in nearly $400 billion per year, it can be hard to grow quickly. New initiatives such as this can help -- especially if they successfully serve more customers by offering desired goods at attractive prices.
Wal-Mart Watch is outraged that the company has "plans for more than 1,000 locations and $10 billion in yearly revenue." $10 billion in yearly revenue is a lot -- more than Southwest Airlines (NYSE:LUV) rakes in per year, for example -- but it would still be a small sum to the giant.
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