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Wal-Mart Stores Inc employees demanding discount on food in latest labour flashpoint

A group of Wal-Mart employees are pushing the world's largest retailer to give workers a discount on food.

After successfully lobbying Wal-Mart Stores Inc. to raise wages, workers have a new demand: Give employees a discount on food. For the world’s largest retailer, that could cost more than US$400 million.

Wal-Mart cutting workers’ hours after pay raise boosts costs

Douglas C. Pizac/AP Photo file
Wal-Mart Stores Inc., in the midst of spending US$1 billion to raise employees’ wages and give them extra training, has been cutting the number of hours some of them work in a bid to keep costs in check.

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Wal-Mart currently offers workers a 10 per cent discount on all merchandise except the vast majority of food. Fruits, vegetables and some snacks are the only food items included in the promotion, unless they’re on sale. Employees want more groceries to be included in the discount, noting that competitors such as Target Corp. and Whole Foods Market Inc. already offer that perk.

“It is ridiculous,” said Janet Sparks, a Wal-Mart employee in Baker, Louisiana, who’s been active in labour groups pushing for higher wages. “You can get a 10 per cent discount on cat food, but if I buy tuna or chicken, I get no discount.”

A group of Wal-Mart workers started an online petition last week calling on the company to expand the discount, and it’s received 12,600 signatures from employees. The group, which isn’t affiliated with a separate organization financially backed by the United Food and Commercial Workers International union, plans to take the petition to store managers and executives this month.

Adding Up

For a company of Wal-Mart’s size, a seemingly small benefit can add up quickly. The 10 per cent discount would be spread out over 1.4 million U.S. employees, more than the population of San Diego.

The average U.S. household with an annual income above US$20,000 spends more than US$3,000 a year on food at home, according to the Bureau of Labor Statistics. If all Wal-Mart employees took advantage of the proposed benefit and purchased their groceries at work, it could cost the retailer more than US$420 million a year in discounts. And that’s in a category with already-thin margins. The supermarket industry has a profit margin of 1.7 per cent, according to research firm IBISWorld.

You can get a 10 per cent discount on cat food, but if I buy tuna or chicken, I get no discount

Wal-Mart, which had more than US$16 billion in profit last year, declined to say how much the additional discount would cost or whether it’s considering such a move. Spokesman Kory Lundberg said the retail giant is always reviewing employee benefits, noting that it offered US$500 million in discounts last year on general merchandise, fruits and vegetables.

The company has surveyed employees on what benefits they would like the company to offer, Lundberg said. While a food discount was mentioned, higher wages, better scheduling and more regular hours were a higher priority, he said.

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