Escalating beef prices have corporate giants McDonald’s and Tyson Foods backtracking in recent days.

And with the summer grilling season just days away, consumers wanting steaks and premium burgers will definitely pay a higher price at their meat market for those cuts, according to industry experts.

The U.S. Department of Agriculture said Friday (May 10) the price of wholesale beef hit an all-time high of $201.68 per 100 pounds. These record prices have forced fast food
titan McDonald’s to rethink its menu strategy.

McDonald’s said it will phase out its Angus burgers to focus on more value menu offerings, namely chicken. The Angus burgers costing between $4 and $5 were one of the more pricier items on McDonald’s menu.

The nation’s larger beef packer, Tyson Foods, said this past week that demand for its premium Angus cuts of meat were down in recent months as prices moved beyond consumers’ tolerance levels at home and abroad.

Tyson said it sold 3.9% less beef in the quarter that ended March 31 compared with a year ago. Its beef prices went up 6.5% over that same period, the company said. "Consumers," Tyson said in its quarterly report, "opted for the relative value of chicken."

McDonald's and other food service operators are trying to offset the higher cost of beef by promoting chicken-based products, something

Wholesale chicken prices have risen sharply in the past year as well. Georgia dock prices indicate boneless chicken breasts were priced at $1.65 per pound a year ago.

This week the wholesale breast price was $2.14. This cut retails for roughly $3 per pound fresh, which is still 66% cheaper than the all-beef retail price of $5 per pound this week.

Exports are an important part of beef industry economics as the U.S. cattle industry produces an excess supply of beef for its own population. Packers like Tyson get a premium price for beef products in other countries and much of the food service hamburger meat products consumed in the United States is imported from Mexico. Without premium export markets, packers are forced to scale back slaughter, which also decreases plant efficiencies.

Last week, the U.S. Meat Export Federation said March export volume for beef was down 7% from the prior year as 83.612 metric tons were shipped with a value of $440 million.

For the first quarter of this year beef export volumes slid 4%, but higher prices equated to $1.3 billion in value, up 5% from last year’s pace.

Tyson said export markets had been timid overall in the first quarter, led by a complete shut down in trade with Russia dating back to early February.

First quarter beef exports to Russia were down 87% from a year ago which totaled about $2.3 million in lost trade, according to USMEF.

Beef exports to former No. 1 market Mexico continue to struggle, with first-quarter results down 27% in volume, roughly $177.1 million in value. Mexico ranks second in export volume to Canada and third in value behind Canada and Japan.

Washington Regional Medical Center is the only hospital in Northwest Arkansas — and one of only four in the state — to earn an “A” Hospital Safety Score by The Leapfrog Group, an independent national nonprofit run by employers and other large purchasers of health benefits, according to a hospital statement.

The “A” score was awarded in the latest update to the Hospital Safety Score, the A, B, C, D or F scores assigned to U.S. hospitals based on preventable medical errors, injuries accidents and infections.

The Hospital Safety Score was compiled under the guidance of the nation’s leading experts on patient safety, including those from Harvard and Johns Hopkins. The first and only hospital safety rating to be peer-reviewed in the Journal of Patient Safety (April 2013), Hospital Safety Score is designed to give the public information they can use to protect themselves and their families.

“Patient safety has always been a priority at Washington Regional, so we are particularly proud to be one of the very few to earn an ‘A’ for our safety practices,” said Bill Bradley, Washington Regional president and CEO. “This top score demonstrates the commitment that our employees, nurses and physicians have to provide our patients with safe, high-quality care.”

Van Buren-based USA Truck inducted 13 new members into the President’s Million Mile Club and honored six existing members reaching new safe driving milestone levels during a luncheon May 4 at the Fort Smith (AR) Convention Center.

The President’s Million Mile Club is reserved for USA Truck driver team members who have logged 1 million or more collision-free miles. Membership currently totals 105 — 82 Bronze Level (1 million), 21 Silver Level (2 million), 1 Gold Level (3 million) and 1 Platinum Level.

The new inductees are: Edward Mundy, Paul Thacker, Ivan Carpenter, Johnny Triplette, Dwayne Lytle, Glen Hays, Robert Fowler, James Rader, Larry Moore, Mark Booze, Jason Teafatiller, Jared Singletary and Kendrick Washington.

Djuan Williams was recognized for moving up to the Silver Level and five driver team members earned notice for reaching the half-million milestone: Robert Decker, James Macy, Ishmall Livingston, Michael Simms and James Causey. Williams and Mundy earned addition recognition from the American Trucking Association for driving 1 million “perfect” (collision-free) miles.

USA Truck President and CEO John Simone delivered the keynote address and Joe Palmer, Director of Fleet Operations, served as master of ceremonies for the luncheon and awards program. A host of existing Million Mile Club members also were on hand, continuing a tradition of supporting and welcoming new inductees.

Simone cited examples to put the accomplishment into perspective, such as equating 1 million miles to 333 trips across the United States.

“Safety is one of our Core Values at USA Truck, and you are the safest drivers in our company,” he said. “How many people can say they’ve driven a half-million or more miles without a preventable collision? When you think about all the miles you run and all the challenges you face day in and day out as professional truck drivers, your outstanding safety records are even more impressive.”

Enplanements were down during April at the Northwest Arkansas Regional Airport (XNA) and up at the Fort Smith Regional Airport, but the year-to-date traffic is up at XNA and down in Fort Smith.

Travelers flying out of XNA during April totaled 43,025, down 2.9% compared to the 44,310 during April 2012. For the first four months of the year, XNA enplanements total 170,009, up 1.02% compared to the same period in 2012. Enplanements were up 2.42% during the first quarter of 2013 compared to the 2012 period.

XNA officials continue to work to land a discount carrier in an effort to provide more price and travel options. Airport officials have said the more expensive fares out of XNA are sending some travelers to other airports.

Enplanements at XNA totaled 565,045 during 2012, up just 0.4% compared to 2011. Although slight, the gain prevented XNA from posting two-consecutive years of enplanement declines.

XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008. It reached a peak of 598,886 in 2007.



FORT SMITH
Enplanements at the Fort Smith Regional Airport totaled 7,231 during April, down 1.57% compared to April 2012.

For the first four months of 2013, enplanements at the airport total 26,189, down 5.1% compared to the same period in 2012. Enplanements during the first quarter were down 7.4% compared to the same period in 2012.

Airport Director John Parker said there are many factors which play into traffic changes, so it is difficult to say what is driving the pattern in Fort Smith. He did say “we’re optimistic about the numbers” and are hopeful they will improve during the summer travel months.

Enplanements at the Fort Smith Regional Airport totaled 86,653 during 2012, just ahead of the 86,234 in 2011, and marking three consecutive years of enplanement gains.

The April figures at Fort Smith end a monthly downward trend that began in the fourth quarter of 2012. Enplanements were down almost 6% during the 2012 fourth quarter compared to the 2011 period.

LITTLE ROCK
Enplanements at the Bill & Hillary Clinton Airport (Little Rock National Airport), totaled 247,424 during the first quarter, down almost 5% compared to the 2012 quarter. March 2013 enplanements totaled 94,153, down 4.55% compared to March 2012. (April numbers were not available as of May 13.)

Enplanements in 2012 totaled 1.147 million, up 4.07% compared to 2011. The 2012 numbers also ended five consecutive years of enplanement declines at Arkansas’ largest commercial field.

NATIONAL NUMBERS
American Airlines, the busiest carrier at XNA and Fort Smith, reported that its April domestic (U.S.) traffic was down 1.4% compared to April 2012.  The Fort Worth-based airline reported total enplanements for the month of 8.786 million, down 1.6% compared to April 2012. For the year, total enplanements for American reached $34.685 million, up 0.1%.

Delta, which is also a major carrier at XNA and Fort Smith, reported that April enplanements for its domestic and international routes totaled 15.546 million, down 0.7%. For the first four months of the year, enplanements totaled 58.621 million, also down 0.7%.

Enplanements in Delta’s U.S. regional routes totaled 9.147 million for the first four months of 2013, down 7.6% compared to the same period in 2012.

The Boyd Group, an aviation consulting company, predicts that in 2013 the reduction in the number of seats in the commercial aviation system will result in an overall 2% to 2.5% decline in passenger traffic.

As the major implementation of the Affordable Care Act looms in the near future, area hospitals are working to prepare.

The City Wire contacted the large hospital networks in Northwest Arkansas and the Fort Smith region for this introductory story. All responded except for Naples, Fla.-based Health Management Associates, which operates Sparks Health System in Fort Smith and Summit Medical Center in Van Buren.

The preparations for the changes coming in 2014 include more staff, more square footage and lots of communication as hospital leaders prepare for an impact that no one so far has been able to confidently project.

“There’s a lot of change coming at us,” agreed Dan McKay, CEO of Northwest Health Systems. “We’ve been communicating with employees to tell them the best we can understand what to expect.”

McKay said he’s been told that in Arkansas, healthcare facilities should expect that 250,000 to 300,000 people will now be eligible for some type of insurance. If anyone had gone without insurance before, it’s reasonable to expect that they would start using those services.

“We were told to expect 10% to 15% of that in our market. There’s no science behind that, it’s just what we were told to expect,” he said. “No one that I’ve talked to knows what’s coming at us as far as that population.”

INFLUX OF DOCTORS
McKay said the biggest focus has been recruiting new doctors with about 30 new doctors being hired last year and a total of 30 more being hired by the end of this year. McKay estimates that Northwest has will have spent $4 million to $6 million in the two-year hiring process.

Many of the doctors have been primary care physicians and family doctors to handle the expected influx of newly insured patients. There are also some specialty physicians in the mix to help with referrals from those primary care doctors for more in-depth care that will be necessary.

Although not related specifically to the hiring increase, McKay said he’s seeing an increasing number of doctors who were previously in private practice decide to become employees of a local health system.

“(The influx of patients) is forcing doctors to align and become employees of hospitals,” he said. “I’ve seen a lot of movement from private practice to the employment model.”

MORE SPACE
Another way that local hospital systems are preparing is to add literal, physical space. All of the area systems have added clinics throughout the region and some have expanded space at the hospital facilities.

The Springdale Campus of Northwest Medical Center just received a $12 million emergency room expansion, McKay said. The Springdale campus is one of four Northwest hospitals in the region: Bentonville, Springdale, Willow Creek and Siloam Springs (relatively new hospital).

“Our strategy is to create a network,” he said. “We have four hospitals and 40 locations from Siloam Springs to Eureka Springs from Bella Vista to Fayetteville.”

Although more of an internal practice, the hospitals are also turning their focus to working even harder to control costs. With the influx of patients coming in with insurance, demand will go up and it’s also expected that costs of supplies will rise. Most of the insurance companies will not be paying full price for those services, which means that hospitals will face having less revenue and more expenses, McKay explained.

SEQUESTRATION ISSUE
At Washington Regional Medical System, preparations for potential healthcare law changes started about eight years ago, Bill Bradley, president and CEO, said in a written statement.

“We’ve been preparing diligently for at least eight years for the quality aspects of healthcare reform and payment modifications based on results, and we are quite pleased with the results,” he wrote. “The investments we made, such as establishing the state’s first community hospital intensivist program and other initiatives, have improved already-good care and also enabled us to receive additional funding for the care we provide.”

Even though hospital officials are pleased with results so far, they face a big challenge in the compounded impact of healthcare reform and sequestration reducing the overall reimbursement for services.

Bradley noted: “Hospitals voluntarily underwrote about 20% of the cost of healthcare reform at its inception and throughout its 10-year statutory life. This was done with the promise of more of the population being insured under some coverage to offset at least part of the cuts in reimbursement. Regrettably, it appears that only about two-thirds of the original number of uninsured will be able to be covered for various reasons; that will only allow about 20% of the cuts in reimbursement to be offset. All this said, we still believe we are prepared for the multi-year impacts of healthcare reform.”

Mercy Health Systems, which has large operations in Northwest Arkansas and the Fort Smith region, has also been deep in preparation for the new healthcare laws in several ways, according to information provided by Martine Pollard, executive director of Communications & Community Integration for the Northwest Arkansas Communities.

“Mercy is rapidly transforming our care delivery model with strategies and initiatives that put us in a good position for the requirements of the Affordable Care Act,” she wrote.
“Because we have been improving our care management and care delivery processes for a decade, we have not isolated a cost we would attribute solely to the ACA. All in healthcare – and especially Mercy - know the cost of health services to our economy as well as the human cost of the uncared for members of our community.”

Mercy is preparing the required benefits analysis but the community dialogue has long been a part of its outreach, Pollard said. The Community Health Needs Assessment have been completed and officials are now focused on measuring Community Health data.  The process will generate more community collaboration efforts aimed at meeting identified community health and access needs, she said.

Pollard outlined several actions that have already taken place that will help Mercy not only be in compliance with the act, but provide what officials believe will be better care. Those include the following actions.
• Mercy has fully implemented a technology platform providing electronic medical records across its entire system.

• Mercy deployed a transition management team in every facility and are meeting our objectives to reduce readmissions.

• Mercy is involved with public and private payors to have a smooth intake process for newcomers to health insurance (in regards to the private option Medicaid expansion).

• Mercy, as a part of one of its Key Initiatives, developed Patient Registries in preparation for Accountable Care Organizations (ACO) and the Comprehensive Primary Care Initiative (CPCI) in Northwest Arkansas.

Wal-Mart has spent the past 17 years trying to perfect its business model in China, garnering about 8% of the retail marketshare in this massive nation of 1.3 billion consumers.

This market contributed about $10.6 billion to Wal-Mart’s gross revenue last year. up 15% from the previous year – still only a drop in the bucket of the retailer’s total $469 billion in topline revenue, according to IBIS World Inc.

The clunky big box model was not an immediate sensation in China, given population density, logistical struggles and tighter government regulations with lack of transparency.

It seems the low cost titan met its match amid a plethora of other frugal options from street vendors to local stores stocked with brand knock-offs. But Wal-Mart has pledged to stay the course as it continues to roll out its “Every Day Low Price” model this year.

Wal-Mart’s International President Doug McMillon said the retailer is still trying to improve their internal operations in China but sees good long-term prospects. In the short run Wal-Mart is working to gain better locations and layouts that are more suited to a supercenter format. He said Wal-Mart still has much work to do in China and that would mean some stores would be shuttered and others relocated as time and opportunity allowed. Wal-Mart closed four of its stores in China last year, with three additional closings planned in 2013.

But unlike other big box players (Best Buy and Home Depot) who have left the China market, Wal-Mart is investing $80 million more to remodel 50 stores and construct 30 new venues. The retailer has pledged to continue making improvements in infrastructure over the next three years, also.

Last week Wal-Mart said it will invest $16.3 million over three years to improve food safety in China as it works to bolster its image after a couple of food-related citations for mislabeled and tainted products coming from within its supply chain. Wal-Mart officials also plan to increase supplier training, improve store standards, recruit more food-safety experts and expand its fresh-food distribution with this investment, a move analysts believe will resonate with Chinese consumers.

SCALING UP
Wal-Mart has just under 400 stores compared to 4,500 in the United States, and while the countries are roughly the same size in land mass, China has four times the U.S. population and buying potential.

Analysts agree Wal-Mart will likely need to play its global e-commerce wildcard to win long term in China as the nation gradually transforms into a customer-driven economy.

Wal-Mart began its retail operations in China in 1996, with the opening of a supercenter and Sam's Club in Shenzhen. But it was a full decade later before Wal-Mart expanded in China by purchasing a 35% interest in Trust-Mart in February 2007. Trust-Mart operates 101 hypermarkets in 34 cities in China under the Trust-Mart banner and the investment in Trust-Mart gave Walmart an opportunity to expand its footprint in China, IBIS World notes.

In 2011, Wal-Mart acquired a majority interest in Trust-Mart and has become the largest foreign-funded supermarket operator in China, surpassing French retailer Carrefour. Even so, Wal-Mart still lacks scale in its brick and mortar stores, according to industry analysts at Kantar Retail.

In 2011, the retailer signed an agreement with the Shanghai local government to establish Wal-Mart's China e-commerce headquarters. This laid the groundwork for another investment which is seen as a “wildcard” that will propel Wal-Mart’s growth in China over the next five years.

In October 2012  Wal-Mart purchased a 51% stake in Yihaodian, one of the leading website shopping platforms within China's e-business market.

Carol Spieckerman, CEO of New Market Builders in Bentonville, credits Wal-Mart with taking a long-term approach in China by plodding a course that integrates brick and mortar with the e-commerce catalyst they secured in the Yihaodian acquisition. For the time being, the Wal-Mart-Yihaodian exclusive partnership essentially locks out European retailers Carrefour and Tesco who are also carving out their own niches in China, Spieckerman said.

She said as the barriers to entry are lowered in the coming years other smaller players will have more e-commerce access, but for now Wal-Mart and Yihaodian have the opportunity to share insights and potentially override any weaknesses they might have individually.

“Wal-Mart is hedging its bet in China, continuing to perfect its brick and mortar model there, but also jumping feet first into the rapidly growing e-commerce market with Yihaodian, who is a leader in the grocery and consumable space,” Spieckerman said.

LESSONS LEARNED
Low prices are everywhere in China and Wal-Mart’s core message of  “saving people money so they can live better” has not necessarily translated with Chinese consumers who have no problem saving money on their own.

Dr. Pu Liu, professor of international finance at the University of Arkansas, said China’s population is extremely disciplined with respect to saving money.

“China lacks the social safety net that American’s enjoy with social security, pensions and Medicare programs. The Chinese are reliant on their children for this support as they age. WIth the one child policy in place, Chinese consumers save throughout their lifetimes. As they shop they are more attuned to value and quality assurance than lowest prices,” Liu said.

He said multi-national retailers with large stores also face stiff competition from local businesses who run smaller convenience stores that cater to neighborhoods within large urban areas, though more modern supermarkets are gradually growing in popularity.

Analysts said retailers have to decide early on how they will conquer the massive land size with limited capital expenditures. Most often that means concentrating on targeted key cities or sometimes penetrating certain regions which can leave the retailer vulnerable to local competition and conceding turf to other competitors.

Liu said China’s middle class has ample money to spend but culturally they only purchase enough food for one or two days at a time, preferring to buy fresh as they have minimal refrigeration and often lack cars to transport larger grocery purchases.

“Most will shop near their homes and purchase only what they carry, which means more frequent trips and lower overall ticket totals,” he said. “It’s a very different dynamic than typically seen in Wal-Mart’s traditional supercenter,” he added.

Analyst said Wal-Mart’s strategy in recent years has been to decentralize away from headquarter control giving store managers more authority for inventory sourcing in the diverse country.

Kantar Retail notes it’s no coincidence Wal-Mart’s toughest big box competitor in China – RT-Mart – posts nearly double the same store sales as its main foreign competitors. The Taiwan-French partnership is a near perfect blend of Wal-Mart-like efficiency with China’s home-town flare.

RIPE OPPORTUNITIES
Liu agreed the rise of mobile phone usage in China over the past few years gives retailers who use e-commerce services an open opportunity to grow sales in the coming years.

“Mobile phones are like jewelry in China, and the smartphone is very much a status symbol that middle class consumers have to own,” Liu said.

A report from Pricewaterhouse Coopers indicates e-commerce shopping has emerged into $211 billion market last year, from nearly non-existent just five years ago. In China, 58% of respondents in the PwC report said they shopped online at least once a week. By comparison, only 42% of U.S. respondents said they shopped online at least once a week.

A separate report from McKinsey & Company released in March notes, “China’s retail sector is among the most wired anywhere – e-tailing commanded about 5 to 6% of total retail sales in 2012, compared with 5% in the United States, though it is distinctly different from that of other countries.

McKinsey notes only a small portion of Chinese e-tailing takes place directly between consumers and retailers as most occurs on digital marketplaces akin to Amazon. Another major discovery in the McKinsey study is that Chinese e-tailing is not just replacing traditional retail transactions but also stimulating consumption that would not otherwise take place.

This e-tailing engine is enabling China’s shift from an investment-oriented society to one that’s more consumption driven. It appears to be spurring incremental consumption, particularly in less developed regions, according to McKinsey.

By analyzing consumption patterns in 266 Chinese cities accounting for over 70% of online retail sales, McKinsey found that $1 of online consumption replaces roughly 60 cents of sales in offline stores and generates around 40 cents of incremental consumption. Based on these estimates, McKinsey expects online sales could generate 4% to 7% in incremental consumption by 2020.

Spieckerman said retailers like Wal-Mart that invest in e-commerce with the patience to wait on profits will likely be in the best position for growth as China’s economy continues moving toward a consumption model.

In the three years it’s been in business Yihaodian has not become profitable, and Wal-Mart has continued with baby steps toward gaining market share; but Spieckerman said as these companies share best practices their sum total will undoubtedly be greater than the original parts.

THE CHINA NUMBERS
• 106,500: The number of employees Wal-Mart has in China
• 95%: The amount of merchandise in its China stores that is sourced locally.
• 20,000: The number of suppliers within China.
• 21: The number of provinces in China where Wal-Mart has stores.

Wal-Mart China Sales Revenue   
2008 $4 billion
2009 $4.97 billion
2010 $7.5  billion
2011 $8.37 billion
2012 $9.21 billion
2013 $10.59 billion (estimated)
Source: IBIS WORLD Inc.

Wall Street anxiously awaits word from Wal-Mart Stores Inc. before the sunrises on Thursday (May 16) for a glimpse into the overall health of the U.S. economy.

The retail giant is expected to report slower growth from softer consumer spending among its core U.S. business while also holding back on expansion abroad.

Before the market opens on Thursday, Wal-Mart will report earnings from its first quarter of fiscal 2014, which ended April 30. The street consensus is $1.15 per share or $3.78 billion in net income for the quarter. This would be a 5.5% gain in net profits from the $1.09 per share pocketed a year ago.

Total sales revenue is expected to top $116.4 billion, up 3% from $113 billion in the same quarter last year.

Budd Bugatch, analyst with Raymond James & Associates, said his estimate for same-store sales among the retailer’s U.S. business is -0.2%, which factors in a slightly positive comparable number for Sam’s Clubs. He said there have been a few notes of caution in terms of domestic demand during Wal-Mart’s first quarter, most notably was Target’s negative sales and earnings per share pre-announcement on April 16 in which comparable sales were expected to range from 0 to 2%.

Retailers in general have cited poor weather in March for weaker overall sales, despite better preliminary reports from April.

“We believe Wal-Mart will be ‘swimming upstream’ in the first quarter and any potential upside to published estimates will likely come from expense control rather than better demand,” Bugatch noted.

While other major retailers also report earnings this week, none carry the weight of Wal-Mart whose 140 million weekly shoppers comprise roughly 10% of the nation’s total retail sales.

Analysts said after a delay in tax refunds led to a slower start in February, Wal-Mart, like other retailers, also faced colder weather over the past two months that hurt sales of warm-weather merchandise and garden supplies.

“We are concerned that soft sales continued into March and April,” said Citigroup analyst Deborah Weinswig, who removed Wal-Mart from Citi’s top picks list. “We believe the impact of higher payroll taxes became a significant headwind.”

But she also noted falling gasoline prices over the past few months provided some relief to cash-strapped consumers. Weinswig estimates the company’s first-quarter same-store sales fell 0.3%, hurt by a 0.5% drop at U.S. stores and a 0.5% gain at Sam’s Club.

She estimates lower gross margins as the world’s largest retailer cut prices to lure shoppers. Bugatch also noted that Wal-Mart posted lower price points than it’s Florida competitors (Target and Publix)  in the recent quarter, which could mean compressed margins.

Other analysts see a glass half full, as Daniel Binder of Jefferies & Co. predicts Wal-Mart’s sales were virtually a repeat of the year-ago results. He has a “buy” rating on the stock with a 12-month target price of $90.

Wal-Mart shares were trading at $78.58, up 8 cents in the early afternoon session today (May 14). For the past 52 weeks the share price has ranged from $58.95 to $79.50. Analysts do agree if Wal-Mart exceeds expectations the stock will likely break through the $80 barrier.

Hyper competitive lease rates have helped put two local restaurants out of business.

Burger Life in Fayetteville will close May 19, a little more than two weeks behind its sister restaurant, MarketPlace Express, which closed May 3.

Burger Life was located near the Malco Razorback Cinema off of Joyce Avenue and near the Northwest Arkansas Mall. MarketPlace Express in Rogers was located in the Pinnacle Hills area, near the John Q. Hammons Convention Center.

Dave Godwin, managing partner of Springdale-based Restaurant Management Group, said the investors continue to scout out new locations in Washington and Benton counties with plans to reopen two Burger Life restaurants in the months ahead.

“We had hoped to renew the leases with the owner of these two locations. But given the competitive market we just could not come to terms,” Godwin said in a phone interview.

The owner of these locations is Leonard Boen, a Little Rock developer who runs MPG Properties.

Godwin said the Restaurant Management Group has no plans for any changes to its three flagship operations, the MarketPlace Grills in Springdale, Fort Smith and Conway.

More than 70 World War II veterans will visit memorials dedicated in their honor during a trip to Washington, D.C., on Saturday, May 18, as part of the sixth Northwest Arkansas Honor Flight.

Thanks to major donations from Tyson Foods Inc. and the Walmart Foundation, as well as others, a commercial jet has been chartered to fly the veterans free of charge from Northwest Arkansas Regional Airport to Washington, D.C., and back. 

The group, which will include veterans as old as 97, will see the World War II Memorial as well as other military memorials during their day in the nation’s capital.

Flight organizers encourage the public to be at the Northwest Arkansas Regional Airport terminal at 7:30 p.m., Saturday evening, to be part of a special return reception for the veterans.

Tyson and the Walmart Foundation have each donated $25,000, which will cover a majority of the $65,000 expense for the trip. Donations are being accepted to help cover the cost of another flight the organization currently has scheduled for October 2013.

The organizers ask that anyone who wants to make a donation or help with a future trip contact Bill McKenzie, Tyson Aviation, at 479-290-5039, or via e-mail to: william.mckenzie@tyson.com.

The Honor Flight Network is a national non-profit organization that started in Ohio in 2005, with six small planes taking a dozen World War II veterans to see their memorial.  Tyson Foods and the Walmart Foundation have been the primary sponsors of six Honor Flights from the Northwest Arkansas Regional Airport since 2009. There have also been three Honor Flight trips from Little Rock since 2012
 

It’s been seven years since the local real estate market has favored sellers to the extent seen last month as buyer demand outpaced inventory levels, according to industry analyst Paul Bynum with MountData.com.

MountData reports April home sales rose 37% in Benton County as agents sold 369 homes last month valued at $69.89 million. The median sales price rose $160,525, up 22% for average of $84 per square foot.

Washington County also posted strong numbers in April with total sales of $41.934 million, up 34% from the same month in 2012. Agents sold 218 homes, compared to 180 in the year-ago period. The median sales price of $157,500 rose 6.5% from last year.

Bynum said there was 3,337 homes listed for sale in the two counties. While the total inventory was up 10% from the prior month, there was still ample buyer demand for homes priced under $150,000.

He said there is 4- to 5-month supply of homes in this affordable price category, which is deemed a seller's market. Homes selling last month were on the market an average of 61 days, a full week shorter than in the previous month.

“Our April sales rose 58% in volume over last year and our agents closed deals on 36% more homes compared to April 2012. It was our best April in a long, long time,” said George Faucette, CEO of the local Coldwell Banker franchise. (These stats take into account Coldwell Banker has recently added 20 agents with the merger of Century 21 Exclamation Realty.)

Like Bynum, Faucette said the lower levels of inventory is helping to drive prices higher given more buyers are taking advantage of low interest rates – averaging 3.4% last month.

Donna Schoby, mortgage loan officer at Liberty Bank, said mortgage rates rose last week, the average 30-year fixed rate increased from 3.35% to 3.42% with buyers paying all closing costs and 0.7% in discount points.

Agents agree rates below 4% go along way in making homes affordable if buyers can qualify with a minimum 640 credit score.

Harold Crye, CEO of Crye-Leike Realty, said his firm’s NWA business was up 58% last month with $37.4 million in total sales. His agents closed deals on 230 homes, up 36% from the same month last year. Together Crye-Leike and Coldwell Banker comprise a lion’s share of the total market.

HIGHER PRICING
Home prices continue to recover in the two-county area with a median price point of $147,000 for the first four months of this year. This is up $12,500 or 9.2% from the same period last year.

Agents say as prices recover at these healthy clips there can be issues with appraisals as they will lag several months behind any real time data.

Connie Turner, an agent with Coldwell Banker, said recently she had two instances where homes went under contract for a certain price, but failed to appraise at that same level, which meant the sellers had to reduce the asking price.

“It’s frustrating when you take a contract to a seller for full asking price and then they have to take less because of conservative appraisals based on older data,” Turner said.

Faucette said it’s not uncommon to see this during a time when prices are rising after years of flat or declining values. 

“Appraisers have to work off of historical data, past sales, they can not take into account current demand. We had a small home on the edge of the Fayetteville’s historical district that we listed for $97,500 which we thought was aggressively priced. It sold in two days. Three people wanted it and bid it up to $110,000,” Faucette said.

He said the deal went through because it was cash, and the appraisal was not tied to any financing which is typically the case for the majority of homeowners.

BIGGER PICTURE
For the full four months of this year agents in the two counties sold 2,009 homes with a value of $356.05 million, up 26% from the same period in 2012, according to MountData.com. Bynum said the local market is shaping up to be a strong year for growth as inventories are expected to increase through the summer selling season as is buyer demand.

Faucette his firm’s sales are up 49% through April, when compared the year ago period. He adds that pending sales in May are also very strong which favor a good report next month as well.

Bynum said across the two counties there were 718 pending sales at the end of April, up from 581 pending transactions in the year-ago period.

Crye said his firm overall is on track to top $5 billion this year with one-third of the year already in the books. Through April, Crye said his firm has posted $1.41 billion in total sales in its combined markets across nine Southern states. Total volume rose 19% while the number of homes sold increased by 12% from a year ago.

“I do expect price increases to moderate some as inventory picks up in the next few months, but I can not think of any real negative pull on the local market at this time,” Faucette said.

Consumer confidence remains somewhat tepid, with two major indices split, during the month of April, according to Bynum’s report.

He notes the local unemployment rate of 5.5% is considerably lower than the national average.

Local economic leaders have said Northwest Arkansas continues to see a stream of newcomers to the region – an average of 30 day – which will push the metropolitan area population above 500,000 by mid 2014. These newcomers have to live somewhere, which means continued opportunity for those selling and renting homes.

HOME SALES (January through April)
Benton County
Sales Volume
2013:  $226.146 million
2012:  $182.380 million
23.99%

Units Sold
2013: 1,256
2012: 1,090
15.22%

Median Sales Price
2013: $148,500
2012: $134,500
10.4%

Washington County
Sales Volume
2013: $129.495 million
2012: $102.654 million
26.14%

Units Sold
2013: 753
2012: 653
15.31%

Median Sales Price
2013: $145,000
2012: $134,950
7.44%

The technology arm of Walmart Global eCommerce known as WalmartLabs has acquired two tech startups that should enhance the retailer’s cloud computing infrastructure and software services portfolio.

The first was an acquisition of OneOps, which has developed a “Platform-as-a-Service” capability that will enable to the retailer to significantly accelerate private cloud infrastructure strategies. Cloud infrastructure is key in mobile applications where data is stored in remote locations.

“OneOps has put an innovative twist on the way product releases are managed and will help us deliver on our plans to bring together best-in-class retail with best-in-class e-commerce to create amazing experiences for customers. We are proud to have them on-board and joining our talent-filled team,” the release notes.

The second acquisition announced was Tasty Labs, a software applications developer based in Mountain View, Calif. Tasty Labs has pioneered more effective ways to connect people via social software. 

The financial terms of these deals have not been released. But the acquisitions do allow Wal-Mart to acquire top technology talent. OneOps co-founders Kire Filipovski, Vitaliy Zinchenko, and Mike Schwankl are technology veterans with proven experience developing software automation solutions who have re-imagined application management in the era of cloud computing, according to the release.

Co-founders of Tasty Labs, Nick Nguyen and Paul Rademacher, will also join WalmartLabs as full-time employees while co-founder Joshua Schachter is signing on as a consultant, according to WalmartLabs blog post on its website.

Jeremy King, chief technology officer at WalmartLabs notes in his blog, “We’ll be adding some of Silicon Valley’s brightest innovators to accelerate our delivery of new products, both within the products organization as well as our mobile team led by Gibu Thomas.”

Carol Spieckerman, of New Market Builders, has said Wal-Mart’s decision to allow WalmartLabs to remain in Silicon Valley has been key in its ability to attract top technology talent and keep it’s nimble start-up mind-set, in spite of the massive scale in which Wal-Mart operates.

“These additions show our commitment to delivering best-in-class technology by attracting some of the best people in Silicon Valley…because we offer the unique opportunity to innovate at a massive, global scale and solve interesting challenges that improve the lives of millions of people at a time,” King notes in his blog.

The pace of activity is slowing in the regional tourism and travel sector based on hospitality tax collections in Fort Smith and Van Buren.

Collections in Van Buren during the first three months of 2013 total $101,133, a slight decline from the $101,700 in the first quarter of 2012.

March collections were $36,524, just slightly ahead of the $36,243 in March 2012. The city collects a 1% tax on lodging and a 1% prepared food tax.

Maryl Koeth, executive director of the Van Buren Advertising & Promotion Commission, is hopeful for gains during the summer travel season.

“We are still seeing at best flat numbers for year over year. I think we will continue to see a very slow climb over the spring and summer months,” Koeth said.

During 2012, Van Buren hospitality tax collections totaled $425,554, up 5.2% compared to the 2011 collections. Hospitality tax collections in Van Buren during 2011 totaled $429,561, up 2.34% compared to 2010. The 2011 collections ended a two-year skid in Van Buren.

FORT SMITH
Collections in Fort Smith for the first quarter totals $171,492, down 6.4% compared to the same period in 2012.

March collections were $66,346, down 3.7% compared to March 2012. The city collects a 3% tax on lodging.

Claude Legris, executive director of the Fort Smith Convention & Visitors Bureau, said the numbers are down, but interest in the area is up.

“While collections show a decrease, this is a smaller decrease than we experienced (down almost $7,000) from March collections year over year, so we are in hopes that activity will pick up soon with the start of tourist season and the publicity from being named ‘Top True Western Town’ in America for 2013,” Legris explained. “This should be the case if our level of electronic inquiry is any indication with our total number of web hits up 14% from March of 2012, and the number of unique visitors up 54% year over year.”

During 2012, Fort Smith hospitality tax collections totaled $746,182, up 5.37% compared to the 2011 period. The city collects a 3% tax on lodging.

Nationwide, the lodging industry is doing well.

Smith Travel Research shows that the overall U.S. hotel industry is up for the first three months of 2013. The March occupancy rate was up 0.4%, the February rate was up 2% and the March occupancy rate was up 3.6%.

The “Hotel Industry Pulse” indicates that the hotel industry is performing better than the overall U.S. economy.

“In the last 12 months, overall economic activity, measured by e-forecasting.com's monthly U.S. GDP, rose by 2.1%. Over the same period, economic activity in U.S. Hotels, measured by HIP, increased by 3.2%,” noted Maria Sogard, CEO of e-forecasting.com.

TOURISM EMPLOYMENT, ARKANSAS COLLECTIONS

Employment in the region’s tourism industry was an estimated 8,800 during March, up from 8,600 in February and down from the 8,900 in March 2012.

Average monthly employment in the Fort Smith metro tourism sector ended a two year decline in 2012. During 2007, 2008 and 2009, the average monthly employment was 9,300. That fell to 8,700 during 2010, 8,500 during 2011, but rose to 9,000 during 2012. The sector reached an employment high of 9,800 in November 2008.

Arkansas’ tourism sector (leisure & hospitality) employed 101,300 during March, down from the 13,600 in February, and down from the 103,200 during March 2012. The sector reached a new high in January of 103,700. The previous high was 103,400 jobs during October 2012.

Arkansas’ 2% tourism tax receipts totaled $1.578 million for the first two reporting months of 2013, just slightly ahead of the $1.577 million during the same period of 2012.

Arkansas’ 2% tourism tax receipts totaled $12.405 million during 2012, up 3.16% compared to the $12.025 million during 2011. The gains marked the third consecutive year of improving tourism tax revenue.

Trucking exec Greg Carman said the industry is tough and uncertain thanks primaritly to inconsistent business trends and costly government regulations.

Carman, the CEO of Fort Smith-based Carman Trucking, was part of a recent panel interview conduced by Talk Business Arkansas executive editor Roby Brock. Brock  hosted the discussion with three trucking executives to seek their insight on the industry, the economy and the future of transportation. The participants are:
• Butch Rice, Stallion Transportation (Beebe)
• Greg Carman, Carman Trucking CEO (Fort Smith)
• Mike McNutt, Distributed Solutions President (Hope)

The following is a transcript of the group’s Q-&-A session, which appears in the latest magazine edition of Talk Business Arkansas.
talkbusiness.net

Roby Brock: What are your general feelings of what’s happening in the economy right now?

Butch Rice: I see things as a little bit uncertain. Our customers this time of year seem to be a larger influence of freight, and right now, we just don’t seem to see it. You know the numbers are supply and demand for freight about as an equal. I just think it’s holding steady from last year actually.

Greg Carman: I’d echo what Butch said about it seems like there is a fairly good balance of truck to loads, it seems that it’s fairly much in balance. What is maddening to me is though this has been going on for about a year. I see a lot of inconsistency. One week it seems that we will have a burst of freight and then the next week in that same sector it will slow down. It doesn’t seem to be anything consistent and it’s really hard to plan. I haven’t seen that in the past cycles over the years – it would either be up or down. I don’t know if it’s because everybody has their inventory so low, they’re just playing catch up and then take a break. It’s really kind of a strange, strange time.

Mike McNutt: We are a little different from Butch and Greg, in the fact that we are probably a 65%-70% refrigerated carrier. Out of that base, the customers that we deliver to, the product is also mainly going to McDonald’s, Burger King, Hardee’s, and fast-food type facilities. What I see in that segment is consistent, strong, seems to be growing. But on our dry van – which I think primarily Butch and Greg have – they said two words that I can relate to: “uncertain” and “inconsistent.” It’s hit and miss every week in that portion of our business, other than maybe packaging and box type business, it seems to be pretty steady but everything else is one week our clients will have quite a bit of business, and then it’s like they turn the faucet off. Our customers are uncertain. I’m like Butch, I don’t think there’s a lot of growth in the economy. I think everyone is just struggling to keep their share of the pie.

Brock: Do you see people having cash flow problems? Has that improved from where we were a year or two or three years ago?

Rice: On the credit side, that is definitely loosened up, I think right now we are able to buy equipment probably about as cheap as you possibly can with the credit side and the interest rates. So that’s been a big plus for us and I think that if that continues, you know when freight does start to pick up I think you’ll see some of us smaller carries actually be able to grow some. But, you know I’m excited about their interest rates, I think that it’s about as cheap as we’ve ever seen it. I’d love to be able to take advantage of it, but right now we are with the uncertainty there we are just maintaining what we got.

Carman: Credit hasn’t been an issue yet, but cash flow is always an issue. It seems to be holding its own. You know, I’m digging down deeper into that. One of the things that I’m dealing with right now is from 2007 to 2010 the cost of my trucks has gone up from about $80,000 to $120,000 truck. A lot of that has been just increased government regulations especially in the emissions area, some of it has been just the cost of raw materials in the trucks. I’m looking at new technologies and I’m really trying hard to see what my return on the investment is. I’m just a little cynical right now. I’m not really seeing the payback on those basically unfunded government mandates.

McNutt: From a company standpoint, we love the cost of borrowing money today. I mean there’s really hardly any cost borrowing money. It gives us a great opportunity to update our fleet if we can afford to. I’m concerned on a federal or global level. At some point, when the rubber meets the road and we get a real cost of what our money is, that concerns me. What’s going to happen to the economy at the point? I see people come in to our company everyday that had small trucking companies – one, two, three trucks – that can’t go borrow money.

Brock: Let me stay with you Mike and we’ll work our way back around. You’re king for a day, you have a magic wand, you get to do one thing to really, dramatically change the trucking environment in a positive way. What would you want to see happen?

McNutt: I have two or three thoughts. As a group, we just met and were talking about a positive impact from an image perspective when you discuss onboard recorders, logging, I think that would impact our industry in a positive way. I’m scared to death about it, but with the workforce that’s out there today, and me being the owner, I would have some security with that. We are struggling with workforce right now. We have loads to haul, but we don’t have people to put in the trucks. I don’t know how to correct that because we have great wages, but they’re just leaving the marketplace. If I could wave my wand and create a bunch of drivers, it would help.

Carman: I would extend on Mike’s comments about the driver situation. I’m probably more pessimistic than the other two, so I’ve got to be careful here. I think over the years, what’s really caused me concern is just a general deterioration in work ethic. It’s basically just finding people to work. We aren’t paying low wages. We are paying high wages with $70,000 a year and decent, pretty good working conditions. I’m trying not to get political here, but when they can go and draw $325 in unemployment a week or get on disability pretty easily, I’m seeing a lot of people just drop out and do that or do nothing. It’s just getting harder and harder. Our workforce is aging. Some of the good workers are out and I don’t see some of the younger generation coming up.

Rice: Well, I’d have to say it would have to be one hell of a wand for me. I really believe that it’s just not our industry, but I think it’s every industry out there that’s struggling with our current workforce. I think the driver is becoming a very highly sought-after commodity. You know if you’ve got a good driving record, you know you’ve not been in trouble with any of your hours of service, then you know you’re a high commodity right now. I think we all three would agree that the success for our company is our drivers. We can sell all we want, we can have the best trucks out there all we want, but if you don’t have a good quality driver, you have nothing.

Home sales for the month of April stayed even with the same month last year, though total sales volume was down in both Crawford and Sebastian Counties.

In Sebastian County, sales of new and existing homes were valued at roughly $10.63 million with 92 homes sold in April. The same period last year saw 90 homes sold, but the value was $12.563 million, meaning this year saw a decline of 15.39% over last year's numbers.

Crawford County was a similar story, though not as drastic. During the month of April, 49 homes were sold, while 45 homes were sold in the same month last year. But the value of homes sold this year was $5.064 million, while last year's value was $5.203 million, a decline of only 2.68%.

Overall, home sales in both markets are down 0.83% during the first four months of 2013 compared to the same period of 2012.

Alice Medlock, broker/owner of Medlock and West Realty in Van Buren, said two issues were driving the lower sales volume – first time home buyers and foreclosures.

She said both would likely continue to keep prices low, especially foreclosures.

"We've already had as many foreclosures listed in the second quarter as we did for the entire year," she said.

The increase in foreclosures has been drastic at all real estate firms, Medlock said.

"Personally, for my company, probably over the last year, ... we've had at least a 200% increase (in foreclosure listings)."

She said another factor in the lower price points could be a lack of sellers in all price ranges, such as high-end homes.

"There were price points missing," Medlock said. "In some areas, there wasn't enough to fill the need, but in other areas it was overloaded. I think there's more listings now than there were last year."

As far as the median price of a home bought last month, Crawford County saw a decrease of 10.25% from $120,900 in April 2012 to $108,506 in April 2013.

In Sebastian County, a decrease was also seen. The median sale price was $99,000 last month, a 13.91% decrease from $115,000 in April 2012.

Home Sales Data (January - April)
• Crawford County
Unit Sales
2013: 135
2012: 178

Total Sales Volume
2013: $13.999 million
2012: $19.967 million

Median Sales Price
2013: $103,450
2012: $100,000

• Sebastian County
Unit Sales
2013: 336
2012: 303

Total Sales Volume
2013: $44.261 million
2012: $38.778 million

Median Sales Price
2013: $103,688
2012: $127,982

Softer consumer sales hindered by higher taxes and larger heating bills this winter led to missed analysts’ expectations by Wal-Mart Stores – but the company still pocketed $3.78 billion in its fiscal first quarter ending April 27.

Early Thursday (May 16) Wal-Mart reported its net income of $1.14 per share rose 4.6%, despite sluggish overall economic growth in the U.S., with the GDP estimated between 1% to 2% in the corresponding months, according the economists at Wells Fargo Securities.

The retail powerhouse predicted in February net profits ranging from $1.11 to $1.15 per share its first quarter. While hitting the mark it set for itself, the results were just shy of Wall Street’s consensus $1.15 estimate.
 
Total revenue for the quarter rose 1% to $113.4 billion, compared to $113 billion last year – and that was up against a negative foreign currency exchange rate that reduced the top line by more than $1 billion.

The quarter marked was by “considerable headwinds” to top line sales, said CEO Mike Duke.

"I'm confident about our long-term strategy and the direction Walmart is headed," Duke said in the earnings statement. "Our expectations about our U.S. businesses' performance, coupled with more discipline in International, will allow us to improve our performance throughout the year."

He said e-commerce sales grew more than 30% in the first quarter versus last year.
 
"There is no doubt that our company is making the right investments in e-commerce to differentiate ourselves and become a better Wal-Mart," said Duke. "And with our sales growth in the first quarter, we believe our investments are paying off.”

The company expects to deliver EPS for Q2 between $1.22 and $1.27, compared to $1.18 last year.

U.S. RESULTS
Operating income in the Walmart U.S. division was $5.329 billion, up 5.9% compared to the same quarter a year ago. Total sales for the division were $66.333 billion, up 0.3%.

Wal-Mart’s commitment to lower prices failed to deliver improvement in same-store sales which fell 1.4%, the first negative comps in nearly two years. One year ago, same-store sales rose 2.6%, followed by 2.2%, 1.5% and 1% increases throughout fiscal year 2013.

Leon Nicholas, senior analyst with Kantar Retail, said Wal-Mart is likely to struggle with low same-store comps (well below 2%) in coming quarters as it continues to cannabilize sales with store saturation amid an ongoing shift to more online sales.

"Despite comps being lower than expected, we continued to generate market share gains," said Bill Simon, Walmart U.S. president and CEO. "According to The Nielsen Company, we gained 20 basis points of market share3 in the measured category of 'food, consumables and health & wellness/OTC' during the 13-weeks ended April 27, 2013."

Simon said during the 13-week period, the Walmart U.S. comp was negatively impacted by a delay in tax refund checks, challenging weather conditions, less grocery inflation than expected and the payroll tax increase. Comp traffic was down 1.8%, while average ticket increased 0.4%.

Wal-Mart continues to focus on lowering prices in hopes of attracting shoppers away from Dollar Stores, but analysts say this consistent drive for the “every day low price” has also taken a toll on gross margins, particularly in consumable food products that traditionally have little room for mark downs.

However, Wal-Mart continues to invest in prime-time media with its “price-comparison” television ads which it produces itself to save on the total cash outlays.

Raymond James & Associates analyst Budd Bugatch said Wal-Mart is a master at leveraging its weight while also controlling overhead costs, which helped to soften the blow from tepid overall consumer demand.

Walmart U.S. expects to increase comps for the second quarter to range between 0% and 2%.

INTERNATIONAL RESULTS
Operating income in the company’s international division totaled $1.256 billion, down 4.7% Total revenue in the division was $32.055 billion, up 2.9%.

Wal-Mart’s international segment, once seen as the main growth engine for the retail juggernaut, has slowed somewhat in developing countries like China, India and Brazil.
 
These countries in addition to Mexico remain under scrutiny by ongoing investigations into business practices and possible violations of the Foreign Corrupt Practices Act.
 
The retailer said it spent $157 million last year relating to these investigations. The retailer spent $73 million on FCPA activities in the quarter, more than the $45 million expected.

"Our stores in the U.K., Africa, Mexico, Central America, Brazil, Chile, Argentina, China and India delivered positive comp sales," said Doug McMillon, Walmart International president and CEO. "Comps in Canada and Japan declined. We grew our share in seven of our eleven markets."

Wal-Mart expanded its footprint in Canada last year bracing for Target’s grand entry which began in March. A price study conducted by Kantar Retail between these two retailers showed a 25-cent difference in an assorted basket of 29 national brands across grocery and health and beauty aids.

The analysts said the competitors were discounting certain items to leverage the retailers’ pricing image.

“Such tight price comparisons so soon after Target’s initial opening signals that the retailer intends to contest its rival’s price position in this market,” notes Robin Sherk, with Kantar Retail.

SAM’S CLUB
Sam’s Club celebrated it’s 30th birthday in the quarter, marking another milestone for the wholesale club. The wholesale club continues to face heightened competition from Wal-Mart supercenters that are cannibalizing some sales.

The division reported operating income of $525 million, up 7.4%. Total revenue at Sam’s Club for the quarter was $13.429 billion, up 0.1%. In the first quarter, Sam's Club comp traffic was up 1.3%, while ticket was down 1.1% for the 13-week period.

"Comp sales for the first quarter were impacted by unfavorable weather and less than expected inflation," said Rosalind Brewer, Sam's Club president and CEO. "Our business member is an integral part of our business, and comp sales and traffic patterns indicated that they remained pressured in the first quarter. Small business optimism remains at historically low levels, as businesses adapt to higher payroll taxes and cautious consumers."

Sam's Club expects to increase comps for the second quarter period to between 1% and 3%.

STOCK GAINS
Wal-Mart is said to be good for consumers seeking low prices, but it’s also been an investment boon for shareholders. The stock price set a new 52-week high – $76.96 – on May 15. Ahead of today’s earnings call, shares traded at $79.99 with a total market capitalization in excess of $262 billion.

The stock price has risen 15.5% this year.

The oracle of Omaha, Warren Buffett is a buyer of Wal-Mart Stores Inc. recently picking up 1.7 million shares giving his firm Berkshire Hathaway 49.2 million shares in the Bentonville-based retailer. Buffett’s stake in Wal-Mart has a street value of $3.9 billion, according a March 15 filing with Securities and Exchange Commission.

Wal-Mart shareholders will convene in Fayetteville on June 7 for the company’s annual shareholder meeting. Roughly 15,000 are expected to attend the “big show” that is a blend of an international pep rally and sales meeting with star-studded entertainment.
 
THE NUMBERS
Wal-Mart Stores Inc.
 
Net Sales Revenue
1Q Fiscal 2014: $113.429 billion
1Q Fiscal 2013: $112.264 billion
up 1%
 
Net Income
1Q Fiscal 2014: $3.784 billion
1Q Fiscal 2013: $3.742 billion
up 1.1%
 
Earnings per share
1Q Fiscal 2014: $1.14
1Q Fiscal 2013: $1.09
up 4.6%

Delmi Sanabria has accepted the dual loan officer position at the Kelley Highway location of Arvest Bank.

Sanabria has been with Arvest more than 10 years. Previously, Delmi was a consumer loan assistant and the 74th Street branch bank location.

Delmi attended college at the University of San Carlos, Guatemala and the University of Arkansas at Fort Smith.

Charlotte Gibson has accepted the position as the mortgage loan officer at the Arvest Bank Rena Road location in Van Buren.

She has been with Arvest more than seven years, and has been a dual purpose lender for more than three years. In that role, Gibson has handled the mortgage and consumer needs for Alma, and has been the mortgage lender for Cloverleaf, Van Buren and Kelley Highway Super Center branches.

In her new job, she will office out of the Rena Road branch, and will handle all mortgage loans for the entire Crawford County market.

Gibson is involved with the Alma Rotary Club and Alma Chamber of Commerce. Charlotte was also named the 2012 Alma Leader of the Year.

Casino-style electronic games of skill wagers at Oaklawn and Southland continued their year-over-year increases, but record months weren’t in the numbers in April.

Still after back-to-back months of record highs, the two racetracks cleared the $1 billion mark in total EGS wagers.

The latest statistics released by the Arkansas Racing Commission showed both tracks with 29% increases in electronic games of skill (EGS) wagering in April versus the previous year.

Hot Springs-based Oaklawn posted April 2013 EGS wagers of $99.22 million, a 29% increase from March 2012. West Memphis-based Southland totaled $179.67 million in EGS wagers in April 2013, a 29% uptick from the previous year.

Year-to-date in the first four months of 2013, the two tracks topped the billion dollar mark with total EGS wagers of $1.111 billion.

Southland’s year-to-date EGS wagers exceeded $731.1 million, while Oaklawn surpassed $380.42 million for the year.

EGS wagers include gambling spent on video blackjack, poker, slot machines and other casino-style games.

David Bartlett was installed as the 2013–2014 chairman of the Arkansas Bankers Association at the 123rd Annual ABA Convention.

Chuck Morgan was installed as Chairman-Elect, Robert Y. “Bob” Taylor as Vice Chairman, and Mark Ferguson as Treasurer.

Bartlett is the President and Chief Banking Officer of Simmons First National Corporation. As President and CBO, residing in Little Rock, David works with the Presidents/CEOs of, and has oversight for, all eight of Simmons First’s affiliate banks located in Pine Bluff, Northwest Arkansas, El Dorado, Searcy, Russellville, Lake Village, Jonesboro and Hot Springs, Arkansas.

Morgan is President and CEO of Pine Bluff National Bank and Jefferson Bancshares, Inc. in Pine Bluff, Arkansas.

Taylor serves as President and CEO of Parkway Bank in Rogers and also as President and CEO of its privately held holding company, Portland Bancshares.

Ferguson is the Executive Vice President of First Security Bancorp where he serves on the executive committee and numerous boards within the corporation.

Documents reviewed by The City Wire show Fort Smith city officials knew about Whirlpool's plan to request a groundwater well ban as early as June of last year and that Whirlpool may not have been forthcoming with the city or the Arkansas Department of Environmental Quality about its request.

According to an e-mail dated June 13, 2012, from Fort Smith's Director of Development Services Wally Bailey to City Administrator Ray Gosack and other recipients, he and Deputy City Administrator Jeff Dingman met on June 5, 2012, with Whirlpool's Fayetteville-based attorney, Robert Jones III and Amber Prince. At the time, Jones informed Bailey and Dingman of the trichloroethylene (TCE) contamination caused by Whirlpool during the 1980s. TCE can be cancer-causing if ingested, Whirlpool said.

"Their apparent purpose is for the city to pass this ordinance and help them with the sale of the property and future responsibility of the problem," Bailey wrote to Gosack.

According to Bailey's e-mail, Jones had already prepared his own draft ordinance that he wanted the city to use when it came before the Board of Directors.

During the meeting with Jones, Bailey had requested information from ADEQ regarding the contamination of the neighborhood north of Whirlpool's manufacturing facility.

‘ADEQ WILL BE SATISFIED’
In a June 8, 2012, e-mail to Bailey and Dingman, Jones said Whirlpool did not have written contact with ADEQ about the issue.

“We have no written communications in any form from ADEQ; however, it is our information and belief that if no water well drilling is permitted with either restricted covenant and deed or by city ordinance in the affected area, ADEQ will be satisfied,” Jones noted in the e-mail.

That was a surprise to Mostafa Mehran, an engineer with ADEQ, who was working with Whirlpool on the contamination issue.

In another e-mail between Bailey and Gosack with Dingman and others copied, it was clear that ADEQ had not discussed the groundwell ban with Whirlpool and did not know who Jones was.

"He is not aware of any conversations about the well drilling prohibition or any plan that has been submitted concerning a long range mitigation or assignments of responsibility regarding the existing groundwater contamination problem," Bailey wrote. "He was not aware of Mr. Bob Jones. He was surprised that his normal contact from Whirlpool was not making the contact with ADEQ or the City."

A letter from Jones to Bailey on Aug. 29, 2012, says definitively that ADEQ had no policy saying a groundwater well ban was an acceptable institutional control.

"We have confirmed that the Arkansas Department of Environmental Quality ('ADEQ') does not have a written policy or guidance that specifically states a ban on the installation of groundwater wells is an acceptable institutional control," he wrote.

"We feel confident that the proposed City of Fort Smith ordinance should satisfy and be acceptable to ADEQ for our intended purpose," Jones wrote.

COMMUNICATION ISSUES
The revelation from Bailey's e-mail and the subsequent letter from Jones was not the first instance of Whirlpool's lack of communication or possible misleading information being presented to the city.

When Jones appeared before the Board of Directors on Feb. 12 of this year, he and environmental consultants for Whirlpool claimed that the TCE plume was stable and not moving.

But a letter from ADEQ that eventually surfaced, dated 20 days prior to the Feb. 12 meeting, raised the possibility that the plume may still be moving, which led to a stinging rebuke from Director Keith Lau.

"They left us with an abandoned manufacturing facility, took production out of the country and left us with a problem," Lau said.

LEGAL ISSUES
Also included in the documents provided to The City Wire was a July 20, 2012, letter from the city's attorney, Jerry Canfield, to Bailey, where he discusses coming up with legal reasons to impose the drilling ban at Whirlpool's request.

"We have given consideration to the legal theories which might be put forth to justify the prohibition of drilling and installation of groundwater wells. Although we have not researched the issue, it might be possible for the City to prohibit the use of water from groundwater wells within the City based on the City's providing of a public, potable water supply because of (1) the economic necessity of universal use of the City's provided potable water supply or (2) enhanced health factors, or a combination of the two," Canfield wrote. "However, as the ordinance does not propose a City wide prohibition in support of the city's potable water supply, we assume that the ordinance will be supported by a different rationale."

Canfield also raised the possibility that the city may be challenged to pay money to property owners for taking away their groundwater well drilling rights.

"The City could be challenged by property owners who contend the City's action is not a proper police power regulation but rather a ‘taking’ of a property right which requires just compensation.

"The City may wish to discuss with Whirlpool an indemnity agreement protecting the City from any liability from claims that the requested ordinance effectuates a 'taking' of a property interest for which just compensation must be paid. We not that the value of the property right to drill and install a water well may be small."

In Jones' Aug. 29 letter to Bailey, he addressed the indemnity issue, stating it would need to be favorable to Whirlpool.

"Regarding the indemnity agreement you propose, Whirlpool is amenable to executing an indemnity agreement with terms that are acceptable to Whirlpool. I understand Jerry Canfield is preparing this and I await his final draft," Jones wrote.

WHIRLPOOL MEETING WITH RESIDENTS
As the year went on and the ordinance was drafted, Jones appeared ready to bring it to the Board of Directors for a vote.

But an Aug. 6, 2012, e-mail from Gosack was clear: no vote would happen without Whirlpool notifying area residents.

"Not until there's been a meeting with the neighborhood to explain it to them," Gosack wrote in an e-mail to Bailey when asked if a decision had been made to present the ordinance to the Board.

Speaking by phone Thursday, Gosack said he required such a meeting so there would be transparency in the process.

“Before we scheduled this matter for the Board's consideration, we wanted to make sure Whirlpool had met with property owners and dealt with this matter with them,” he said. “I think that's what created the current interest in this problem was requiring Whirlpool to have that neighborhood meeting and even though Whirlpool had sent notices previously, and I haven't seen those, so I don't know what they've seen, but I don't think people knew the seriousness (of the problem).”

ERIN BROCKOVICH INVOLVEMENT
According to a Board of Directors meeting packet from Feb. 12 of this year, the same day Jones made his initial presentation of the ordinance, only five people showed up to that meeting with Jones and three others, including Robert Karwowski of Whirlpool.

One of the neighborhood property owners in attendance was Debbie Keith, who helped lead the effort to get getting the Erin Brockovich Firm to become involved in the contamination issue. The Brockovich Firm is conducting independent tests in the area to see if the TCE contamination is spreading and to see if other pollutants may be in the area.

Gosack said he did not believe any city officials were at the meeting.

The vote for a groundwater well ban eventually failed when voted on by the Board of Directors in March.

Whirlpool is working with ADEQ on a mitigation plan for cleanup at the site.

OTHER WHIRLPOOL PROBLEMS
But the troubles in Arkansas are hardly the only problem Whirlpool is facing at the moment. On Tuesday, a group of residents in Clyde, Ohio, filed a class action lawsuit against the company.

According to a report that appeared in the Sandusky Register, “the families of five young people who died of cancer in the Clyde area filed a federal class action lawsuit against Whirlpool Tuesday claiming that dumping by the company caused the five deaths and numerous other injuries.”

It is the second lawsuit filed this year against Whirlpool that involves an alleged cancer cluster.

"The lawsuit accuses Whirlpool of disposing of chemicals from the manufacturing process 'in a dangerous and negligent way so as to kill said plaintiffs' children and others similarly situated. It mentions chemicals found in the former Whirlpool Park and the presence of a chemical, benzaldehyde, which apparently traveled through the air and was found in dust taken from attics in Clyde homes," the Register's Tom Jackson reported. "The lawsuit also alleges what Whirlpool officials made false statements when they denied knowing that PCBs and other chemicals were dumped in Whirlpool Park in Green Springs."

According to the Environmental Protection Agency, polychlorinated biphenyl (PCB) has "been demonstrated to cause cancer, as well as a variety of other adverse health effects on the immune system, reproductive system, nervous system, and endocrine system."

Legal action has not yet been sought by any Fort Smith area residents against Whirlpool, though at a town hall meeting, many former employees and residents around the facility discussed ongoing health problems.

A call to Whirlpool seeking comment was not returned.