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August 2nd, 2006 Jacques Von Lunen | News Stories
 

The Big Box-Off

IKEA shows Wal-Mart how to be a big box with little opposition.

     
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When Swedish furniture giant IKEA broke ground for a new store off I-205 last Tuesday, Portlanders responded with a resounding "Skol!"

What a difference from the angry reception another big-boxer, Wal-Mart, has faced when it has tried to plant its flag around these parts.

Portland City Commissioner Sam Adams, Wal-Mart's loudest opponent in City Hall, told WW he welcomes IKEA because it gives back to the community, treads lightly on the environment and encourages customers to take public transportation. Wal-Mart, he says, does not.

But is IKEA really such a different big box from Wal-Mart? While Portlanders count the days until next year's IKEA opening (when they'll no longer have to drive 160 miles north to get their fix of the company's sleek Euro design), here's a scorecard that compares IKEA with Wal-Mart.

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.

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.

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.

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.

CONCLUSION

IKEA seems ahead of the curve on issues people care about. Nobody has tried seriously to unionize a U.S. IKEA store. Wal-Mart has faced numerous labor lawsuits and only recently began to clean up its environmental record. IKEA comes out looking like your friendly neighborhood store compared with Wal-Mart.

 
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