- The Washington Times - Monday, October 24, 2005

SPRINGFIELD, Mo. (AP) — Wal-Mart Stores Inc. announced more affordable health care for some of its workers yesterday in the latest volley in a battle with critics for the hearts of consumers.

Analysts say Wal-Mart must add about $250 million a day in sales during the holiday season to meet earnings targets and cannot afford to lose ground to an increasingly united front of opponents who want consumers to shun the discounter until it changes its ways.

“Consumers increasingly have a conscience and are increasingly shifting to competitors,” said Burt Flickinger, managing director of Strategic Marketing.

“It is critical for Wal-Mart to start doing a billion dollars a day in sales starting on Black Friday, the day after Thanksgiving, which is the big 30-day push for Christmas and year-end sales,” Mr. Flickinger said. He said daily sales are now about $750 million.

Pressure on Wal-Mart has mounted as groups ranging from unions to the Sierra Club to the National Organization for Women have linked up, creating two new campaign organizations this year, Wake-Up Wal-Mart and Wal-Mart Watch.

“Where there is pressure there is change, universally,” said Richard Hastings, senior retail analyst at Bernard Sands in New York.

Wal-Mart insists it is not responding to outside critics but rather to its employees, or associates in Wal-Mart parlance, by introducing a plan to lower health insurance premiums — allowing some to buy coverage for as little as $11 per month.

Wal-Mart spokesman Dan Fogleman would not say how much the plan would cost the Bentonville, Ark.-based company, which has 1.2 million domestic employees. The plan is to go into effect in 2006.

The move comes as Wal-Mart comes under increasing criticism for not offering health coverage to enough workers and for its high costs to employees for the insurance, which include high deductibles. Less than half of Wal-Mart’s employees are covered by the company health care plan, compared with 80 percent at rival Costco Wholesale Corp.

Wal-Mart’s critics have said some company workers have had to rely on government-funded programs to pay for health care, an issue that has spurred federal legislation intended to pressure the retailer to be more generous.

Compared with Wal-Mart’s current plan, monthly premiums under the new plan would require workers to pay between 40 percent and 60 percent less. The plan would have a $1,000 deductible but would allow workers three doctor visits before having to pay the deductible, according to the New York Times, which first reported on the plan.

The $11 monthly premium won’t be widely available. The plan would have most workers pay about $25 per month, and $65 for a family. A single parent would pay $37 per month. The plan has a $25,000 cap for a worker’s first year with the insurance.

It is the latest move in a series of changes after Wal-Mart earlier this year took out full-page ads in national newspapers to defend itself as good for the economy, employees and consumers.


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