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:

WORKING CONDITIONS:

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.


IMPACT ON THE LANDSCAPE:

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.


IMPACT ON THE ECONOMY:

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.


CULTURAL CACHET:

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.