July 25, 2007
By Derek Reveron
Hispanics are among Wal-Mart's most loyal
customers and account for about 14 percent of the
127 million people who shop at the retailer's stores in
the United States every week, said Lee Scott, the
company's CEO, during a speech Tuesday at the
National Council of La Raza convention in Miami
Beach, Fla.
Many of Wal-Mart's customers are either immigrants
or first-generation Latinos looking to build a better life
by stretching their disposable income, he added on
the last day of the conference, which began July
21.
Scott said Hispanic consumers have increasingly
less money to spend with retailers, including Wal-
Mart, due to problems in the economy. In particular,
layoffs in the slumping housing market, which
employs a disproportionate number of Hispanics,
have hit Latinos hard, along with high energy and
health-care costs, Scott said.
"Many Hispanics have a harder time sharing money
with their families abroad, and I see an impact at
stores in Mexico and Central America," he
said.
Despite economic dips, Scott said the Hispanic
market's long-term growth is likely to help fuel retail
sales for years to come.
"From 1990 to 2011, if the trend continues, Hispanic
buying power will have grown by more than 450
percent. That's compared to a growth rate of only 176
percent for non-Hispanic buying power over the same
time period," he said.
Scott noted that Hispanic customers are three times
more likely than non-Hispanic customers to go
without a checking or savings account, adding that
Wal-Mart is trying to reach out with different initiatives
for a more stable well-being.
In June, Wal-Mart announced plans to open 1,000
MoneyCenter in-store financial service centers by the
end of 2008. The centers allow Hispanics and other
customers to acquire the Wal-Mart-branded
MoneyCard debit card and cash checks, with the
ability to transfer money and pay bills.
Collectively, Scott said, all of Wal-Mart's customers
will save up to $320 million this year by using the
centers. Since Hispanics account for 14 percent of the
chain's consumers, that could mean Latino
customers would reap millions in savings through the
centers and by buying goods at the discount retailer,
he said.
Wal-Mart's Hispanic ad spending reached $15.3
million from January to May this year, compared with
$17.3 million in the same time period in 2006,
according to Nielsen Monitor-Plus.
Scott added that Hispanics' focus on the family
continues to bring them to Wal-Mart in large
numbers.
"It's a family affair, literally," he said. "You can walk
through our stores in Hispanic communities and see
individuals shopping like they do everywhere else. But
you also see a lot more groups and entire families.
People are enjoying the experience and their time
together."
He likens Wal-Mart to a community-gathering place
where Hispanic families run into friends and
neighbors.
Scott noted that Congress needs to pass a
comprehensive immigration reform bill now, and he is
disappointed that it hasn't happened. Immigration
reform directly affects Wal-Mart because it has
154,000 Hispanic employees, more than any other
company in the world.
Collectively, Scott said, all of Wal-Mart's customers
will save up to $320 million this year by using the
centers. Since Hispanics account for 14 percent of the
chain's consumers, that could mean Latino
customers would reap millions in savings through the
centers and by buying goods at the discount retailer,
he said.
Last year, Wal-Mart agreed to pay an $11 million civil
settlement after an investigation by U.S. Immigration
and Customs Enforcement discovered that janitors
Wal-Mart hired through a cleaning service were
undocumented. Wal-Mart claimed it didn't know the
employment status of the immigrant workers.
Scott said that his concern about social and economic
issues affecting Hispanic consumers is far from
intellectual. "Having a Mexican-American
granddaughter helps me to understand that this is not
a cerebral exercise," Scott said. "This is emotion and
real people we're dealing with."
