Upper Left Coast

Thoughts on politics, faith, sports and other random topics from a red state sympathizer in indigo-blue Portland, Oregon.

Wednesday, August 02, 2006

IKEA vs. Wal-Mart

Today's Willamette Week has a story sub-headlined, "IKEA shows Wal-Mart how to be a big box with little opposition." It then goes on to highlight the working conditions, environmental impact, economic impact, and cultural niche of the respective chains, somehow reaching the conclusion at the end that "IKEA comes out looking like your friendly neighborhood store compared with Wal-Mart."

But if you look at the evidence from each category, you'd be hard-pressed to understand how reporter Jacques Von Lunen came up with that conclusion. Here's the tale of the tape -- Von Lunen's info followed by my comments:

Wal-Mart spokeswoman Jennifer Holder says its Oregon employees make $10.44 an hour on average, which would work out to about $18,450 a year for a "full-time" employee (as Wal-Mart views anyone working 34 or more hours per week). About 70 percent work full-time, and benefits are available after a six-month waiting period. Wal-Mart critics say the company drives up average-wage data by including managers' salaries and exaggerating its percentage of full-time workers.

IKEA doesn't release pay or benefit information, but spokesman Joseph Roth says, "Co-workers are paid a living wage," with no waiting period for benefits. Fortune magazine reports that IKEA salespeople earn $18,300 a year. Unlike Wal-Mart, IKEA regularly makes Fortune's "Top 100 companies to work for" but slipped from No. 62 to No. 96 this year.

A side note: Both list China, nobody's top choice for worker-friendly conditions, as their No. 1 supplier.
Comment: That $18,450 figure is for a 34-hour worker; someone working 40 hours would earn $21,715 a year, which is almost 20 percent higher than an IKEA salesperson; even a 34-hour worker earns more than those salespeople.

Von Lunen nicely allows Wal-Mart's "critics" (of which they are legion) to accuse the company of exaggerating wages by including managers' salaries and lying about the number of full-time workers. Von Lunen conveniently leaves out some information: Who are these critics? And what is their evidence? And how do we know whether IKEA's definition of a "living wage" is the same as those who hoot and holler about Wal-Mart's supposed low pay? IKEA won't release wage data, so we don't.

Advantage: Slight advantage to IKEA because they offer benefits immediately, but points to Wal-Mart for paying better average wages.

IKEA's Portland store will be 280,000 square feet, making even Wal-Mart's largest Supercenters (185,000 square feet) feel downright cozy by comparison. But the combined total of all seven Portland-area Wal-Marts is 959,000 square feet.

IKEA gets enviro props, proclaiming it "only buys wood from managed forests, never from natural forests." Roth says all new IKEA stores, including the one in Portland, will seek LEED green-building certification by meeting energy and environmental standards. Wal-Mart has moved recently to improve building and truck fleet efficiency and has become the world's biggest seller of organic milk and organic cotton. IKEA doesn't offer organic cotton in its line of bed-wear.
Comment: IKEA's Portland store will be 50 percent larger than the biggest Wal-Mart store, and if IKEA had seven stores in this area, the total would be twice as large as the Wal-Mart running tally -- not counting parking. But really, the footprint of these stores is irrelevant -- the store locations are zoned for commercial use, so it's not like someone will try to grow a managed forest on any of the lots.

However, it is interesting that IKEA builds one location and forces any would-be customer to drive there, regardless of their distance from the store (be honest, how many people have driven to Seattle to visit the IKEA store?). Yet Wal-Mart, with seven locations, is likely a much shorter drive, and is much more accessible for the walker, the biker or the mass-transit rider. So on a per-capita basis, who's burning more fossil fuels? And don't fool yourself -- the fact that IKEA is adjacent to light rail is meaningless; no one is going to cart their new bedroom set home on MAX.

All new IKEA stores will seek green-building certification? What does that mean for the older ones? And if Wal-Mart has moved recently to improve building and truck fleet efficiency, why is that seemingly meaningless to the chain's critics? C'mon! It even offers organic cotton, something IKEA does not!

Advantage: a wash.

Wal-Mart is the world's largest retailer, employing 1.3 million in the United States and more than 10,000 in its 29 Oregon stores alone. IKEA has about 10,000 "co-workers" in all its 28 U.S. locations.

On its biggest day, the day after Thanksgiving 2002, Wal-Mart grossed $1.43 billion, nearly as much as IKEA took in that entire year. IKEA's U.S. earnings were $2 billion last year, barely 1 percent of Wal-Mart's $191.8 billion.
Comment: Just a question: how much does Wal-Mart -- with 130 times the number of employees as IKEA and 96 times the earnings -- pay in taxes to the various state and federal entities compared to IKEA? Wanna bet who pays more? A ton more?

Oh, yes, they drive the mom-and-pop stores out of business. Well, sometimes I'm sure that's true. But I'm willing to bet we don't hear the many stories of mom-and-pop stores that either make changes to survive, or already have a loyal customer base that allows them to continue on just fine, thank you.

Advantage: Wal-Mart by an Arkansas mile.

IKEA offers salmon plates and Swedish meatballs in its cafeteria-style restaurants; Wal-Mart rents out space to McDonald's and Subway. IKEA toys include "Ratta," the stuffed rat, and "Krabba," the stuffed crab. Wal-Mart offers "Barbie's Jammin' Jeep Wrangler" and John Deere toy tractors.
Comment: What the hell is a "cachet," anyway? And how is this category relevant to the discussion? Actually, it is helpful -- the definition is "an indication of approved or superior status," and that word beautifully illustrates the elitist attitude of Wal-Mart's opponents.

Disadvantage: Willamette Week, Commissioner Sam Adams, and those people coming to my door hoping I'll sign petitions against the next Wal-Mart.


  • At 8/03/2006 9:39 PM, Anonymous Anonymous said…

    I am shocked. You want to use facts, logic and objective analysis when dealing with Wal-Mart. What's next? Dogs laying down with cats?


  • At 8/08/2006 9:26 AM, Anonymous Anonymous said…

    Your comparison of Wal Mart to Ikea is such a great example of comparing apples to oranges. Is Wal Mart to Target or Kmart a fair comparison - yes. To Ikea? No.

    Ikea is a specialty retailer of home furnishings and accessories. They don't sell clothes, car batteries, shampoo or groceries.

  • At 8/08/2006 9:40 AM, Blogger Ken said…

    I agree, but if you actually read the post, you'd see it was Willamette Week that made the comparison.

  • At 9/04/2006 7:41 AM, Blogger Stephanie said…

    Regarding the wage issue....the $18400 is walmarts AVERAGE Wage....that means that the commonest, basic jobs in the store are paid much LESS than that. So the Wal Mart version of Ikea's "sales people" which I assume are the people you find among the racks, restocking and doing whatever, I can guarantee are not making $18,400 per year! Ikea's salespeople, which are the people you find among the aisles restocking and checking on things, those people are paid $18,300. And Ikea didn't say if that was fulltime (40 hrs) or a part timer. I have been looking at Ikea for a job and most of their openings are part time. And FULL BENEFITS FOR PEOPLE WORKING 20 HOURS A WEEK???? HELLO I think I'd like to work there! How much money is THAT worth? Tack that on to Ikea's wage!!! Not to mention flexible and compressed work week, and even PAID ADOPTION LEAVE? YES! Do I shop at Walmart? Absolutely...it's near me, sells everything, cheap and convenient. Would I want to WORK there? There's a million places I'd rather try first!

  • At 4/23/2007 1:06 PM, Anonymous Burpas said…

    What about a comparison of the tons of unredeemingly fugly crap Walmart shovels out versus the stuff from IKEA which for the most part is at least fashion-forward, designed with some level of interest and pleasant to look at? Clear advantage IKEA. Walmart totally sucks ass.

  • At 7/25/2007 3:50 PM, Anonymous Anonymous said…

    Ooh. They are right. Liberals love the poor, but hate to shop where they shop.

  • At 2/29/2008 3:28 PM, Blogger Klockarman said…

    I've been comparing Ikea and Wal-Mart for a long time, pointing out their many similarities.

    I shop at Wal-Mart, sometimes. I also shop at Ikea, sometimes. But, I don't swoon over Ikea like the left does, though. Ikea, like Wal-Mart sells largely low-quality goods from China.

    The only advantage Ikea has is that its products are (to many folks judgment) much hipper designs and cooler colors - but that's not much more but window dressing. Oh, and Ikea hails from the ultra-hip socialist democracy with European chic that is Sweden. In contrast, Wal-Mart hails from that backwards, red-neck bastion of Arkansas. To the latte-sipping, Volvo-driving, Wal-Mart bashing lefty, Wal-Mart just doesn't cut it - since image is everything.

    Yes, when I shop at Wal-Mart I do see folks that likely fall in the category of "poor". They are shopping there for the staple items and to get a good price.

    I do find it troubling that those same latte-sipping, Volvo-driving, Ikea-loving, Wal-Mart bashing lefties that proclaim the importance of helping the poor, are the same people that wouldn't be caught dead shopping next to them at a Wal-Mart store.

  • At 11/25/2008 5:37 PM, Anonymous Anonymous said…

    well, i hope all those commenting have first hand knowledge of IKEA. doesn't sound like it. the VAST majority of IKEA co-workers are hired "part-time", meaning less than 20 hours per week, entitling them to MINIMAL benefits and a health plan cost that is inexcusably costly to the co-worker (50/50 co-worker/company paid). of course, very few co-workers ACTUALLY work < 20 hours per week, but that status is still "part-time". as of this posting, a staff slimming-down is going on at one local store (ikea is firing left-and-right). consensus is that this is because business is down and rather than call these departures "layoffs" and pay unemployment comp, firing is more cost effective. Yes, benefits are available for part-time co-workers, but at a greatly reduced scale than for full-time hourly or salaried co-workers. IKEA, IMO, has gotten WAY too much praise and not nearly enough constructive criticism.

    Oh, WAL-MART ? Seems the pay scales are about the same as IKEA, bottom line (+/- 10%). I know someone who has worked full-time at a WalMart for 8 years and makes a decent wage (~$14/hr) as a cashier, graveyard shift, but can't afford medical insurance there. As a full-time co-worker at IKEA, she would be able to afford it, but her wage would be lower.

  • At 11/04/2009 1:33 AM, Anonymous Anonymous said…

    As someone who works at Ikea as one of the many "co-workers" of the world, I can tell you nobody gets full time hours unless you're management. The people in my department who have been there for years at most will get 32hrs in a two week period, on average closer to 28-30hrs and for a new person like myself my hrs have ranged from 25hrs to 16hrs per week.

    Whats really upsetting is in the Restaurant where I work, it has already made over a million dollars this year, minimum they are pulling in $10k a day and still hours are short for most people.

    Its sickening to me that corporate juggernauts like Ikea & Walmart can make as much money as they do, while the average person working there gets stiffed on hours, a decent wage and peace of mind.

  • At 7/16/2010 12:51 PM, Anonymous Anonymous said…

    I work at ikea part time (20 hours a week or more if we are having a kitchen event) I make 14.50 an hour to start. What are you all talking about? They told me they give regular pay increases every year. HELLO! I went to University for Graphic design, have been at the same company for 3 years and am still being paid 11.50 an hour, forcing me to get the ikea job. Sorry, Ikea is a wicked company to work for. I'm happy there. I actually applied to Walmart and the whole interview process was about smoking weed, and asking if I will report someone who smokes weed, even if they are not at work, and do I think that they should be fired. WHAT? I was so offended by these questions, I don't care if someone is doing drugs on their off time. I was very turned off and did not return for my call back. I went somewhere else, I felt like there was this assumption that everyone is smoking pot and if you're working there, you're likely a loser that Walmart already can't trust.

  • At 8/25/2011 8:27 PM, Anonymous Anonymous said…

    I've worked for Ikea for 5+ years. It is a very frustrating place to work for. For once, I have been given raises, but they have been 10 to 15 cent raises. This has brought my wage to about 12.50/hr. Another thing, they got rid of their leadership training programs along with the coordinator positions making it IMPOSSIBLE for any coworker to move up or make a career. Also, there is a yearly bonus they call "WIN WIN," which gives a certain bonus percentage of your salary at the end of the year. Needless to say that one year, our bonus was $40 bucks, not $400, 40, while managers and admins made about $6,000 to $10,000 regardless of whether or not the store did well. I can go on and on on how much is wrong with this company but I'm feeling frustated talking about it.

  • At 8/26/2011 10:52 PM, Anonymous Klockarman said…

    @Anonymous (8/25/2011):

    If it sucks so bad working at Wal-Mart, why don't you quit, and get another job?

    They aren't holding you hostage.


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