Will the Wal-Mart Strike Work?
This year, Wal-Mart (NYSE:WMT) will open its doors at 8 p.m. on Thursday to kick off Black Friday sales. The world’s largest retailer will try to lure consumers out of post-Thanksgiving naps and away from online retailers by offering steep discounts on holiday items. Despite the median net worth of families dropping by 39 percent between 2007 and 2010, and gruelingly slow growth since, the National Retail Federation expects 152 million Black Friday shoppers to hit stores this weekend, kicking off a 4.1 percent year-over-year increase in holiday shopping.
Retailers like Wal-Mart have been forced to launch and promote sales more aggressively than ever in the face of tough competition with online marketplaces like Amazon.com (NASDAQ:AMZN) and eBay (NASDAQ:EBAY).
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Massive savings will no doubt spur budget-conscious shoppers to stores on Thursday and Friday, and many would-be customers this year will face a decision at the doors of Walmart stores across the nation. Specifically, labor unions are organizing a Black Friday walkout from the world’s largest employer, staging a demonstration in pursuit of better wages and better working conditions.
The protests are backed by groups such as OUR Walmart, Making Change at Wal-Mart, and Corporate Action Network. Organizers from OUR Walmart claim to have 1,000 events planned and growing online support for their initiative. Workers want the minimum hourly wage raised to $13, more full-time work, and reliable health care insurance contributions from their employer.
In an interview with CBS, Dan Hindman, who has worked at Wal-Mart for four years, said “Wal-Mart needs to learn that it’s not fair how they treat us.” Hindman’s schedule was cut to part-time for joining a pro-union employee organization.
David Tovar, a Wal-Mart spokesperson, issued a statement saying “This is just another union publicity stunt, and the numbers they are talking about are grossly exaggerated. If associates are scheduled to work on Black Friday, we expect them to show up and do their job.”
It’s easy for budget-conscious shoppers to distance themselves from the trials and tribulations of Wal-Mart employees on Black Friday. Especially with the economic conditions as tough as they are, hundreds of dollars in savings is a huge motivating factor to ignore a picket line and capitalize on some good deals.
The NRF expects the fiscal cliff to affect spending decisions for two out of three shoppers. Outside of asking consumers not to consume — a scenario that would cause greater harm for fourth-quarter economic activity — consumers will go farther out of their way to seek better deals. Wal-Mart, for its part, is obviously in the business of convincing those shoppers to show up at their stores.
At the end of the day, consumers will vote with their dollars and many expect that the protests will have a minimal impact on Black Friday shopping. Zev Eigen, a professor at Northwestern University, told The Washington Post, “Shoppers in the parking lot will say ‘Oh, that’s terrible — OK, where do I get my discounted electronics,'” summing up the sentiment of several observers. As it stands, the movement is too small to catalyze any real change.
Wal-Mart issued fourth-quarter guidance that came in below analysts’ expectations, and does not expect the protests to affect its results.