Wednesday, September 20, 2006

Ethical retailing

What a difference a few years can make.

When Wal-Mart came to Canada back in 1993, it turned retailing upside down in Canada in pretty much the same way it did in the United States. It was also a bold new adventure for the Bentonville, Arkansas based company. In the United States, it generally shuns inner cities (although in recent years it has opened stores in Los Angeles and Manhattan); here it was acquiring a company that was well rooted in the cities. People quickly cottoned on to its sterile but thought out layout (with triple the number of product offerings from its predecessor) and its super-low prices. As I noted last year, it proved to be a huge challenge for some well-established companies; many of which fell by the wayside.

One of the reasons for Wal-Mart's success was its commitment to customer service. One couldn't help but turn around and find someone saying "Can I help you find something?" People made an obvious comparison to Canadian Tire, where store clerks would often say "it's over there" and point to a swath of aisles six deep -- as if to say, "Just get your stuff and get the hell out of here." (CTC is -- for the uninitiated -- a cross between Autozone, Bed Bath and Beyond, Bass Pro Shop, Radio Shack and Sports Chalet.) It wasn't as if they were going away anytime soon ... after all, they're the leading auto parts depot in Canada. But it was like they need a huge attitude adjustment.

The last few years have seen a major improvement. Most stores have been remodeled and are much larger than before and easier to browse. The product selection is better and of higher quality, the prices are competitive, and the staff are actually helpful for a change. They've even been known to refer customers to smaller competitors if they have a better product or can do a better job on an installation. More important, though, is that they still have a large portion of products which are made by union labour. In other words, they're trying to differentiate themselves by at least making an effort to be an ethical business.

Other retailers have also adjusted to the reality of the Wal-Mart world. Some have been successful, but others haven't been. And as a response to Canadian retailers waking up, Wal-Mart now sells groceries in its outlets here, including fresh meat and vegetables in its largest fronts; just like they have in the States for years. Don't be surprised if they start selling mattresses -- and undercutting chains like Sleep Country. Or they start to be open 24 hours, like in the States. The fact remains, however, Wal-Mart is still a juggernaut. They may not be near the 15% or so of all US retail sales here in Canada, but they're powerful enough to force suppliers to sell to them at price points that barely break even for them -- but mean a winfall for Wal-Mart.

My problem isn't that I'm against companies making a profit. Of course I am in favour of profits. We tax those profits and use them to finance health care, education and defence. My problem is using cheap or prison overseas labour and turning a blind eye to social responsibility. Wal-Mart just doesn't seem to give a damn, despite their recent publicity campaign.

Another example, which kind of flips things around, is Tim Horton's and Starbucks. Incredible as it may sound, Timmy got a failing grade on corporate responsibility, even though it has long sponsored childrens' programmes in Canada. Seattle-based Starbucks, reviled by social activists even as recently as several years ago, actually got a high mark. Why? Because Starbucks now has a verifiable percentage of "fair trade" coffee in its content, and is committed to increase it over the next few years. Tims has no such verification program as far as I am aware -- in fact, there's no way to know if there is any organic coffee content in a Tims. Surely it can't be that hard to find suppliers who can give the same taste we've come to know and love. I think Canadians wouldn't mind paying a little bit more if it ensured coffee growers got a fair price -- not the price set on the Big Board which is usually a starvation one.

I think it's time we took the time to actually check the labels on products and ask a few questions. It's not that hard to shop in an ethical manner. It doesn't mean I'm not going to stop going to Tims or Wal-Mart, if the price is right. But alternatives do exist, and they should be used whenever possible.

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