Wal-Mart Memo Suggests Ways to Reduce Benefit Costs
New York City, An internal memo sent to Wal-Mart Stores’ board of directors proposes numerous ways to hold down spending on health care and other benefits in ways that minimize damage to the retailer’s reputation, including hiring more part-time workers, according to a report in Wednesday’s The New York Times. The paper said the draft memo was obtained from Wal-Mart Watch, a pressure group allied with labor unions that are critical of Wal-Mart’s pay and benefits. A spokesperson for the group said someone mailed the document anonymously to Wal-Mart Watch last month.
The paper said in the memo that Susan Chambers, Wal-Mart’s executive VP for benefits, recommends reducing 401(k) contributions, reducing company-paid life-insurance policies, and attracting younger, and presumably healthier, workers by offering education benefits and by arranging for all jobs to involve some physical activity.
Other proposals include reducing the amount of time, from two years to one, that part-time employees would have to wait before qualifying for health insurance. Another would place health clinics in stores, in part to help reduce expensive employee visits to emergency rooms. The memo also promotes health savings accounts.
Wal-Mart executives said the memo was part of an effort to rein in benefit costs, which have increased by 15% annually on average since 2002. Like other retailers, the company finds itself increasingly squeezed by soaring health-related costs. The proposed plan, if approved, would save the company more than $1 billion a year by 2011, according to the newspaper.
Tuesday Morning Posts 9.2% Income Growth
Dallas, Tuesday Morning Corporation reported net income for the third quarter ended Sept. 30 increased 9.2% to $8.2 million, compared to $7.5 million for the third quarter of 2004. As previously reported, net sales for the third quarter of 2005 increased 3.3% to $192.3 million from $186.1 million for the third quarter last year. Comparable store sales, excluding the impact from the hurricanes, decreased 3.6% for the third quarter of 2005.
Wal-Mart Bolsters Eco-Friendly Practices
Bentonville, Ark., On the heels of a plan to make health care more affordable for its associates, Wal-Mart Stores introduced a second major act of corporate responsibility: this time it’s corporate policies aimed at environmental stewardship. The company hopes to save costs as well as reduce energy use in its stores, increase the fuel efficiency of its trucking system and encourage its vendors to follow suit, the New York Times reported. In an address to employees, CEO Lee Scott said: “As one of the largest companies in the world, with an expanding global presence, environmental problems are our problems.”
Some of Wal-Mart’s plans specifics are to invest $500 million in technologies that will reduce greenhouse gases from stores and distribution centers by 20% over the next seven years; increase the fuel efficiency of its truck fleet by 25% over the next three years and double it within 10 years. The company also intends to design a new store within four years that is at least 25% more energy-efficient.
The company recently unveiled an experimental store in McKinney, Texas, that includes eco-friendly features such as a 120 ft. –tall wind turbine, solar panels and a bio-waste boiler that converts waste oil from cooking fryers and motors into heat.