Thursday, December 28, 2006

Wal-Mart enters India...gets a $7 billion investment

Wal-Mart gets $7 billion investment
by Brian White

Wal-Mart's entry into the Indian market will receive a huge lift with the announcement of a $7 billion investment by Bharti.
Bharti is the Indian company that has agreed to partner with the world's largest retailer to open locations in India where Wal-Mart currently has no retail presence.

Bharti will invest $7 billion by 2010 to ensure that the retail joint venture is setup and started with the resources it needs to be successful right from the start. The two companies will be setting up 200 large supermarket-type stores and hundreds of smaller large-format stores.

Wal-Mart will now cater to an estimated 300 million Indian citizens -- a population that has become increasingly affluent and a market that global retailers are eying with jaws wide open. This piece of pie is up for grabs -- like China -- and when growth slows in the U.S., to other global markets go the retailers.
(Feed taken from

This is Wal-Marts pearl to be able to open a store to India, this only increases Wal-Mart's imperialistic power. Stores in India will flurish, economy will begin to stagger, local businesses will close, people will rely on Wal-Mart for everything leaving those who broke their backs to create businesses in shambles. Prices will be cheaper than what they are used to paying, but it all goes back to the hidden costs of Wal-Mart, we just hope that the people of India are aware of this before all goes wrong.

What does 2007 hold for Wal-Mart?

What does 2007 hold for Wal-Mart?
2006 was a rough time for Wal-Mart Stores Inc. (NYSE:WMT) in many media respects, as the company missed targets, saw same-store sales growth decline, and saw some lows that had not been reached in a decade. Still, the world's largest retailer saw growth this year -- just not as much as some unrealistic market watchers wanted.

Wal-Mart's marketing strategy took several hits, a scandal in its advertising department as Wal-Mart dropped its new ad agency. Also Wal-Mart's attempt to cater to higher-income shoppers and regionalize the products in its stores to cater to local demographics saw little steam (so far). So, what should 2007 bring?

I'm not sure Wal-Mart can ever change its image to what it thinks it can with consumers. The power of branding is too strong, and Wal-Mart's super-glued brand is "low prices." Period. Trying to market to shoppers who associate Wal-Mart with low prices (and not anything else) is probably going to prove futile. But, hey, growth has to come from somewhere, right? Perhaps outside of the U.S. -- like India and China, where Wal-Mart is moving into with rapid aplomb.

Tuesday, December 26, 2006

Fulton Mall may be custom made for Wal-Mart

Wal-Mart targets Albee Square … again
By Ariella Cohen
The Brooklyn Papers

Fulton Mall may be custom made for Wal-Mart.

The city is now considering a plan to tear down the aging Gallery shopping center to make way for a soaring mixed-use tower that could accommodate a Wal-Mart, the New York Sun reported last week.

If the deal were completed, Albee Square, as the site is known, would be rebuilt into Fulton Mall’s most ambitious project yet — a glistening tower that would include 800 apartments, 100,000 square feet of office space and a 500,00-square-foot ground-floor perfect for the behemoth of Bentonville, Arkansas.

Wal-Mart has been eyeing a Downtown site for at least two years, including the Albee Square location. The discount chain has been trying to open a store in New York City, but has met strong opposition from organized labor and (less-organized) environmentalists.

Wal-Mart spokesman Philip Serghini declined to comment on the Albee location, but reiterated that the retailer was “actively reviewing potential sites in all five boroughs.”

Albee Square, nestled between busy DeKalb and Flatbush avenues, is attractive to retailers like Wal-Mart thanks to the 100,000 pedestrians who pass by it daily. Right now, the Gallery’s biggest-name tenants are Toys “R” Us and a Forever 21 clothing store.

On a recent Saturday, the low-rise mall hosted far fewer shoppers than Fulton Street’s pedestrian corridor, but sold many of the same discount shoes and heavily marked-down leather goods.

“Buy one leather jacket and get two for free,” barked a hawker at the mall’s entrance. “Sell them on the street and get your money back!”

The Gallery was previously owned by Atlantic Yards developer Bruce Ratner, who sold to to Joe Sitt’s Thor Equities after it failed to attract enough high-dollar tenants. Because it sits on land that is owned by the city, the Economic Development Corporation will help decide what will be built.

Sitt is reportedly trying to flip the site, take his profit, and move on, leaving the city to find a new developer to carry out its big-box, big-tower vision.

At least one Fulton Mall businessman said Wal-Mart would be out of place in Downtown Brooklyn.

“People come here on tour buses when they want to see what real New York is like,” said Leo Gulfam, a former graffiti artist who rents a storefront where he customizes clothing, jewelry and Air Jordan sneakers with everything from Pakistani flags to picture of Tweedy Bird.

“Our people are crazy about bling,” he said. “They aren’t crazy about Wal-Mart.”

Tuesday, December 19, 2006

Wal-Mart Wins Ruling on Foreign Labor, Sets up Communist Party in China Wal-Mart

Wal-Mart Stores cannot be held liable under United States law for labor conditions at some of its overseas suppliers, a federal judge has ruled.

A complaint filed last year in Los Angeles by the International Labor Rights Fund contended that employees of Wal-Mart suppliers in China, Bangladesh, Indonesia, Swaziland and Nicaragua were forced to work overtime without pay and in some cases were fired because they tried to organize unions. The group sought to represent hundreds of thousands of employees of Wal-Mart’s overseas suppliers. The New York Times Reports here.

International Herald Tribune
Communist Party branch set up at Wal-Mart's China headquarters
Sunday, December 17, 2006

Employees at Wal-Mart's China headquarters have set up a Communist Party branch, the company and party said Monday, amid a campaign to expand the ruling party's presence in foreign companies.

The move follows the success of China's state-sanctioned labor body this year in setting up unions at the U.S. retailer's outlets. Wal-Mart is one of China's biggest and most prominent foreign employers, with a workforce of 36,000 and 68 stores.

The party branch was set up Friday at Wal-Mart headquarters in the southern city of Shenzhen, according to the party newspaper People's Daily and a Wal-Mart Stores Inc. spokesman, Jonathan Dong.

"Quite a few of our associates (employees) are party members already, so they have a right to establish branch organizations," Dong said.

Dong said he didn't know whether Wal-Mart would have any formal interaction with the branch or whether its establishment would affect operations. Employees who answered the phone at the party's Shenzhen office and wouldn't give their names said they had no information on what the branch at the Wal-Mart headquarters would do.

China's 70 million-member Communist Party and its affiliated All-China Federation of Trade Unions are trying to expand their presence in foreign companies to keep pace with a fast-changing society amid capitalist-style economic reforms.

State industry, their traditional base, has slashed millions of jobs while private companies are creating tens of millions more.

In a bid to stay relevant, the party has begun offering membership to entrepreneurs and others in the new private economy.

The ACFTU, the umbrella body for unions permitted by the government, has announced a target of setting up unions at 60 percent of China's 150,000 foreign companies by the end of this year.

An ACFTU spokesman, Li Jianmin, said Monday he had no figures on how close the body is to meeting that goal.

The party has not disclosed its own expansion target.

The party branch at Wal-Mart headquarters is the company's sixth in China, according to Dong.

The first was set up Aug. 12 in the northeastern city of Shenyang. Party officials there said it would not interfere in store management. An official quoted by the state Xinhua News Agency said the Shenyang branch would encourage members to "to play an exemplary role in doing a good job" and to help Wal-Mart grow.

Many foreign companies in China already have party branches, either officially or unofficially.

One of the earliest was at U.S.-based cell phone maker Motorola Inc. in the eastern city of Tianjin. The branch officially was established in 1997, but news accounts say it was set up as early as 1990 and kept secret in order to avoid alarming Motorola management.

Wal-Mart, based in Bentonville, Arkansas, resisted the creation of unions at its Chinese stores for two years before agreeing in August to help the ACFTU organize its workers.

The party and labor expansion campaigns were ordered in March by President Hu Jintao, who also is the party's general secretary, according to Chinese media.

"Do a better job of building (Communist) Party organizations and trade unions in foreign-invested enterprises," the order said, according to the newspaper Beijing News.

Friday, December 15, 2006

Wal-Mart & Brooklyn a Perfect fit??

The New York Sun highlighted Mayor Bloomberg's new plans for NYC with this article focusing on Brooklyn, and the speculation for Wal-Mart as a perfect fit....

City in Talks on Future of Big Site For Building in Downtown Brooklyn

BY DAVID LOMBINO - Staff Reporter of the Sun

December 14, 2006


While the city's master plan for downtown Brooklyn was originally spawned to create soaring commercial towers, the city is now negotiating with two private developers to build a $500 million project that would be predominantly residential and retail.

It would be the first major site developed in the area since the city rezoned downtown Brooklyn for increased commercial development two and a half years ago. The project would contain a cavernous retail base that could accommodate a large big-box store such as Wal-Mart, according to sources familiar with the deal.

If finalized, the large site known as Albee Square at the intersection of Flatbush Avenue and Willoughby Street would contain more than 800 apartments, 20% of which would be "affordable housing"; as much as 100,000 square feet of office space, and 500,000 square feet of retail space designed for an anchor tenant, according to a source familiar with the plans. The lot is currently occupied by the Gallery at Fulton Street, which is a shopping mall, and a large parking garage.

Developer Joseph Sitt of Thor Equities would flip the site he purchased for a reported $25 million in 2001 to a partnership between PA Associates/Acadia Realty Trust and Avalon Properties, according to a source familiar with the deal. The new owners could construct up to 1.5 million square feet of mixeduse space under the recently up-zoned plans. Financial details of the transaction were unavailable, but real estate experts said Mr. Sitt would stand to make a fortune, as real estate values in the area have skyrocketed.

The city owns the land underneath the site and Mr. Sitt controls the development rights. Sources familiar with the negotiations said the city's Economic Development Corp. is unsatisfied with the offer for the land it owns and had hoped to see more office space in the plan.

The president of the Real Estate Board of New York, Steven Spinola, said negotiations between Mr. Sitt and the city and the buyers are entering the final phases.

"The city is encouraging the office space, and the retail needs to be done," Mr. Spinola said. "The residential obviously is the surest thing."

About two years ago, the Bloomberg administration passed an ambitious rezoning plan for downtown Brooklyn, currently the third largest commercial district in the city, that envisioned as much as 5.4 million square feet of new commercial space and about 1,000 new units of housing, mostly along Livingston Street. While the market for new commercial buildings is red hot in Midtown Manhattan, no private developer has ventured into downtown Brooklyn since the rezoning to build a large office building.

Nearby, at the planned $4 billion Atlantic Yards project in Prospect Heights, developer Forest City Ratner drastically cut back on plans to build office space, and increased the number of planned apartments.

A spokesman for the Economic Development Corporation, Andrew Brent, said yesterday that indications from the private sector seem to favor mixed-use development of residential, retail, and commercial space than large stand-alone office buildings with anchor tenants.

"The negotiations for the Albee Square development are very much ongoing, but we're confident that at the end of the day, while the corporate component may be somewhat less than what was envisioned four years ago, the project will catalyze surrounding office development, and its contribution to Downtown Brooklyn's growing vibrancy will be greater than ever," Mr. Brent said.

In 2004, speculation circulated that Wal-Mart was eyeballing the Albee Square site for its first New York City store. Because the site would be as-of-right, the world's largest retailer would not need approval from the City Council, which has been critical of Wal-Mart's treatment of employees.

The executive director of sales for Halstead Brooklyn, William Ross, said the large retail space with room for a lot of parking would be "the least objectionable space in all of Brooklyn for a Wal-Mart."

Pointing to four large apartment buildings going up nearby along Gold and Myrtle Streets, Mr. Ross said the Albee Square development is the latest sign that Flatbush Avenue is undergoing a residential transformation. The city has committed up to $500 million to improve the area's parks, open space, infrastructure, and to pave the way for the Atlantic Yards project.

"Downtown Brooklyn was rezoned two years ago, and nothing happened. Now, everything is happening at once," Mr. Ross said.

Mr. Ross said developers' calculations in downtown Brooklyn are crystal clear.

"You make twice as much selling condos as you do renting office space," he said.

An executive director for Cushman & Wakefield, Glenn Markman, said the demand for commercial space in downtown Brooklyn is growing, despite the loss of the Albee Square site to mostly apartments.

"I don't think that this is a sign of weakness in the marketplace," Mr. Markman said. "It just takes a while for the commercial market to attract the tenants that we're hoping to get. If that transaction is concludes, it is another positive sign for downtown Brooklyn."

A spokesman for Thor Equities, Lee Silberstein, would not comment for this story.
A spokesman for the president of Brooklyn, Marty Markowitz, said negotiations should be concluded quickly so that Brooklynites could begin enjoy the benefits of new development.


Also Check out

Why an Agency Said No to Wal-Mart [New York Times]
A week after stunning Madison Avenue by tossing out the results of a lengthy and expensive search for new advertising agencies, Wal-Mart Stores has decided to ask four of the five finalists from the previous review to take another shot at the $580 million assignment. One invitee, however, has declared, to borrow an old song title, “Thanks a lot, but no thanks.” The agency is GSD&M in Austin, Tex., part of the Omnicom Group, which has created campaigns for Wal-Mart since 1987

Tuesday, December 12, 2006

Legal Challenge to Wal-Mart

The NY Sun reports(Josh Gerstein): Novel Legal Challenge to Wal-Mart

A bid to use the American legal system to hold Wal-Mart accountable for alleged abuses at its suppliers' factories overseas is faltering after a federal judge indicated he is inclined to dismiss the case.
Judge Andrew Guilford issued a tentative ruling yesterday that would dismiss a wide-ranging lawsuit filed against the retail giant last year on behalf of workers at factories in Bangladesh, China, Indonesia, Nicaragua, and Swaziland.
The suit alleges that the facilities failed to pay minimum wage, forced overtime work on unwilling employees, and blocked workers from organizing unions.
The attorney for the workers, Terry Collingsworth, argued that the foreign workers had no realistic prospect of suing in their own countries. "They don't have adequate access to courts there," he said. "This is their sole place to try to be heard."

This is an extremely interesting and important case in legal and labor history, if the decision continues to look this bleak, Wal-Mart cannot be reprimanded for mistreating workers in other countries. What we cannot grasp is why, Why Wal-Mart even mistreats workers, the 300 plus billion dollar company should be more ethical and responsible and should see no problem with paying their workers a living wage and quality benefits.

Monday, December 11, 2006

Rocky Return to the Roots at Wal-Mart

Friday, December 08, 2006

The week in Wal-Mart

We wanted to leave SNL skit up in front of the blog because we loved it so much, but here's an overview in the Week in Wal-Mart...

In Montreal, Wal-Mart has lost a battle in the Quebec Court of Appeal to fight the unionization of its store in Gatineau. Back in the US - Oklahoma, Wal-Mart has just settled a $5.1 million dollar class-action lawsuit brought by the estates of 73 former employees, it turns out Wal-Mart had taken out life insurance policies on its employees, making itself the beneficiary, the families of the employees who passed away were forced to sue in order to recover the life insurance benefits...What a disgusting move by the worlds largest employer.

In a terribly sad story a family in
Indianapolis sues Wal-Mart for the death of their 3 year old son. The family of a 3-year-old killed in July when a mirror fell on him at an Indianapolis Wal-Mart store filed a lawsuit charging negligence and seeking unspecified damages. Wal-Mart's layaway program see's its last day.

Senior marketing executive Julie Roehm has left Wal-Mart Stores Inc. after less than a year on the job, which then lead to the diminish of Wal-Mart's new Ad agency after signing a $570 million dollar contract. The New York Times actually wrote a great article on the entire bizzare situation read that here.

Monday, December 04, 2006

Saturday Night Live, Jay Leno Rip Wal-Mart

This weeks Saturday Night Live took a shot at Wal-Mart by airing their idea of a Wal-Mart commercial.

Leno Rips Wal-Mart
Taken from Tonight Show with Jay Leno

"Here’s some bad news. Wal-Mart has reported that its pre-Christmas sales were down in November. Well, thank God that doesn’t affect anything made in America."

Wal-Mart "Thanks" Workers

Wal-Mart has admitted they owe something to their 1.3 million laborers in the United States. It's taken years and years and years of protests, mailings, complaints and demonstrations for them to realize this. So how is Wal-Mart planning on thanking the 1.3 million who run their company?? By giving them polo shirts and an additional 10% off on a specific item each week. The program is called "Associates Out in Front" and was leaked to the New York Times by Wake Up Wal-Mart
The program includes several new perks “as a way of saying thank you” to workers, like a special polo shirt after 20 years of service....Employees who last 40 years will receive matching pants with an option to trade in their Polo shirt for a special edition DVD of "Car 54, Where are You?"
Under the program, store managers are to meet each week with 10 employees who sign up to discuss concerns, suggestions and ideas for improving operations. The program also requires regional general managers to conduct monthly town-hall meetings that are open to every worker in the area.

What are Associates saying about the program?
  • Cleo Forward, a 37-year-old support manager at a Wal-Mart in Dallas, said the new program was promising, but that it fell short in recognizing long-time workers who felt unappreciated by the changes. “They are going to spend $15 on a Polo for you after 20 years? Give me a break,” he said. “We would rather they lift the wage caps.”

  • “Many of the associates were very upset,” Mr. Uselton said, a 35-year-old overnight floor cleaner at a Wal-Mart in Tyler, Tex.. “Management is just not listening anymore.” Some Wal-Mart employees said workers might be afraid to speak up because they have seen coworkers retaliated against — for instance, transferred to worse shifts when they voiced their complaints.
It's yet another weak attempt by Wal-Mart to win back their employee's, but if you are an employee and you are buying this "Associates Out in Front Program" please ask yourself the same thing Cleo Forward did and many others are...You spend 20 years at a company and their thank you is a $15 Polo shirt made in a sweatshop in Cambodia, sounds like payback to me.

Read the entire New York Times article.

Friday, December 01, 2006

Wal-Mart's too quick of a change

Taken from the New York Times Nov.30th 2006

Wal-Mart Trips as It Changes a Bit

Too Fast

The most wonderful time of the year? Tell that to Wal-Mart.

The world’s largest retailer has long dominated the holiday shopping season, with eye-popping discounts that drew throngs of customers and made life miserable for competitors.

After fresh price cuts this month, few doubted they would own this season, too. But this heartwarming storyline for Wal-Mart has turned into heartburn for the company.

Today, the retailer is expected to announce, based on its own estimates, that sales for November fell for the first time in a decade.

“In a season of what has been pretty healthy numbers from retailers, Wal-Mart has been lackluster, to say the least,” said Adrianne Shapira, an analyst at Goldman Sachs. “Houston, there is a problem.”

But what exactly is the problem?

At first glance, the stumbles seem to resurrect the perennial question: is Wal-Mart too big for its own good, making it impossible to achieve the gravity-defying growth that Wall Street has counted on for four decades.

Yet, what is happening now appears to be more complicated than Wal-Mart hitting a wall. It may simply be changing too fast, acting more like a start-up than a company with 6,000 stores, 1.3 million employees and sales of $312 billion. And that may not be such a bad thing in the long run.

In the last year, Wal-Mart has introduced a dizzying number of new strategies: it started a line of urban fashion, began renovating 1,800 stores, overhauled its advertising to focus less on price and more on style, rolled out $4 generic drugs, ended its layaway program and imposed wage caps on its workers, to name just a few.

Given its size, even the slightest misstep is magnified. And this season, Wal-Mart has made several, alienating shoppers with designer-inspired clothing and disruptive store remodeling.

And when these miscues occur at the same time, as they have recently, they spook not just investors in Wal-Mart — its shares are down 5 percent this month — but the broader stock market as well.

Wal-Mart has little choice but to change, analysts said. The company’s formula since 1962 — pile cheap merchandise high and watch it fly — is no longer enough. Competitors like Target and Best Buy have stolen shoppers with smarter fashions and sleeker electronics, leaving Wal-Mart to sell Americans mostly everyday products like laundry detergent and socks.

And the company’s strategy of growing through relentless store openings — about 300 a year for the last decade — has begun to hurt the retailer as much as help it by siphoning away sales from other Wal-Marts nearby.

The problem shows up in a crucial yardstick of its performance: sales at stores open at least a year, like the November figure that rattled investors.

Since the beginning of 2006, Wal-Mart’s monthly sales have risen 2.4 percent, half as fast as Target, which posted a 4.8 increase.

Wall Street has been urging the company to find a solution to the slide.

“They need to take some risks,” said Christine K. Augustine, an analyst at Bear Stearns, who expressed alarm at the company’s November performance. “I do not fault them for trying new things.”

But the turnaround effort — which the company has dubbed “Wal-Mart Out In Front” — is taking longer than investors had hoped. And there is a growing consensus that the rapid pace of change may be one reason why.

Individually, the strategies can be viewed as healthy fixes to longstanding problems at Wal-Mart. Trendier (and pricier) clothing, for example, will theoretically persuade consumers to spend more at Wal-Mart, rather than, say, Kohl’s. Ending layaway plans and capping wages will save the company money.

Collectively, however, these measures have created the retail equivalent of cacophony in the stores, temporarily disorienting consumers and employees at a crucial time of year.

For example, at the same time that Wal-Mart introduced fur-trimmed jeans in the clothing department and 42-inch flat-screen televisions in the electronics section this year, it also began renovating hundreds of stores, “making it difficult to find all that enticing new stuff,” Ms. Augustine said.

“They are working at cross purposes over a short period,” she said.

Wal-Mart executives have conceded that the company’s efforts to reinvent itself have hit a few snags.

Several weeks ago, H. Lee Scott Jr., the chief executive of Wal-Mart, told analysts that he was “surprised that the disruption that occurred during the remodels was as extensive as it has been.”

The new clothing at Wal-Mart created problems, too. After early success with a designer women’s clothing line called Metro7 in 600 mostly urban area stores, the company rolled out the fashions across the chain.

It did not work. The average Wal-Mart shopper lives in the suburbs, is roughly 5-foot-2 and wears a size 14 — making them poor candidates for the skinny jeans that were a popular, tight-fitting fashion in urban markets.

Consumers like Shirley Shepherd, who lives outside Salt Lake City, Utah, balked at the unfamiliar clothes.

“I would never buy dress clothes here,” said Ms. Shepherd, who shops at the Wal-Mart in Midvale, Utah, twice a week for staples like toothpaste, batteries, underwear and socks.

It’s not just a simple matter of new fashions not selling well. The new clothes took up space where Wal-Mart stocked reliable sellers like basic blouses and sensible skirts. So the entire apparel department suffered, contributing to the November sales drop.

Mr. Scott said the company moved “too far, too fast” with the Metro7 clothing line and will now sell it only in its urban stores.

By ending layaway plans, which allowed low-income shoppers to make purchases in installments, the chain freed up the store space and employees.

But it also upset shoppers like Michele Kahindi, a 30-year-old mother of three who lives in Portland, Ore.

Eliminating the program “hinders a mom’s ability to hide stuff from the kids,” she said. “I don’t get it. Now Kmart is going to get my layaway business.”

Some of the changes at Wal-Mart have worked.

Higher-priced electronics have been a hit. By offering products like flat-panel televisions, cellphones and MP3 players at several prices — including a $3,000 plasma-screen TV — Wal-Mart has tripled sales in some stores, proving that consumers will buy upscale products at the chain.

The way the company manages its work force has also helped its bottom line. For example, it is relying on more part-time workers and asking them to be available at night and on weekends when checkout lines are longest.

Sprucing up stores, while temporarily frustrating to shoppers, has improved sales, the company said.

But the company’s hope for a turnaround in store sales could take at least a year, if not longer, for several reasons.

It is too late to cancel the latest orders for Metro7, meaning hundreds of stores will be saddled with the slow-selling fashions for months. Renovations, on hold for the rest of the holiday season to make shopping easier, will start up again in January.

And Wal-Mart said it is still grappling with the aftermath of Hurricane Katrina, which the company has said is skewing its sales figures.

Bigger spending by victims of the storm, who received federal funding to rebuild, increased sales at the chain last year, making it harder for the company to improve on last year’s performance. (In November 2005, for example, Wal-Mart’s monthly sales rose 4.3 percent.)

Analysts also noted that a separate Wal-Mart strategy should improve the company’s fortunes. In October, it said it would begin to apply the brakes on new store growth in part to focus more on improving the performance of its existing outlets.

In a small but symbolically important adjustment that will result in enormous cost savings, the company will expand its square footage at a rate of 7.5 percent in 2007, down from 8 percent in the last several years,

For now, Wal-Mart’s message to investors and customers appears to be the same as the one on the signs in its renovated stores: please excuse our appearance — and performance — while we are under construction.

“The size of the undertaking,” said Ms. Shapira of Goldman Sachs, “should not be overlooked.”

Brian Libby contributed reporting from Portland, Ore., and Martin Stolz from Midvale, Utah.

Wal-Mart’s Nov sales show is the worst in a decade

Wal-Mart’s Nov sales show is the worst in a decade

NEW YORK: Wal-Mart Stores, the world’s largest retailer, said US same-store sales fell 0.1% in November, the worst performance in more than 10 years, as holiday discounts on toys and electronics failed to lure customers.

December sales at stores open at least a year will rise between 0 to 1%, the company said Thursday. November marks the second month in a row that the retailer has reported sales of less than 1%. Since last month, Wal-Mart cut prices on toys, electronics, groceries & appliances and extended its $4 generic drug programme to all US pharmacies. At the same time, it has upgraded stores and merchandise to win affluent shoppers away from Macy’s and Target.

“They don’t have a cohesive strategy, they are flailing around,” said Patricia Edwards, a Seattle-based money manager at Wentworth, Hauser & Violich, with $8.2 billion in assets including Wal-Mart shares. “I think that there are many more Target shoppers and department-store shoppers than there were a year ago.”

November’s performance, which matched a preliminary estimate Wal-Mart provided November 25, is the worst since April l996, when same-store sales fell 0.6% after a shift in the timing of Easter. In November 2005, Wal-Mart’s US same-store sales increased 4.3% after shoppers restocked after hurricanes Katrina and Rita. Neil Currie, an analyst at UBS Securities in New York, was “somewhat surprised” by the company’s weak sales this month after it cut prices aggressively, he wrote in a November 27 research note. “Perhaps the multitude of rollbacks at Wal-Mart did not have the desired, broad shopping effect.”

Wal-Mart’s results probably pulled the expected November gain at US retailers down to 2.5%, the International Council of Shopping Centres and UBS said November 28. In October, Wal-Mart said disappointing clothing sales and renovations hurt sales, posting a 0.5% gain after initially forecasting a rise of 2-4%. Wal-Mart’s “upscale move may be alienating its core customer”, Charles Grom, an analyst at JP Morgan Securities said. The company is modernising more than half of its US Wal-Mart stores. Wal-Mart finished the first round of 1,200 stores this month and will begin work on the remaining 600 in February.

However, overall US retailers may report a 2.5% rise in November sales, the smallest increase since March. Demand accelerated in the final week of the month with the start of the holiday shopping season, according to the International Council of Shopping Centres, which provided the November estimate. Most retailers will report sales today.

“The higher-end stores seem to be doing well because wealthy people are less susceptible to higher oil prices and interest rates,” said Matthew Kelmon, who helps manage $400 million, including Best Buy and Wal-Mart shares, at Kelmoore Investment in Palo Alto, California. “The people buying at Wal-Mart are squeezed.”