Wal-Mart to Close Union-Targeted Store -- Report

Wal-Mart (WMT) said Wednesday that it will close a store in Canada where workers were close to establishing the retail giant's first labor union, according to The Associated Press.

The company plans to close the store in Jonquiere, Quebec, because it says union negotiators are making unreasonable demands that threaten the store's business.

Last week, the United Food and Commercial Workers of Canada asked Quebec labor officials to appoint a mediator in its talks with Wal-Mart in hopes that it would help break a logjam in negotiations.

"We were hoping it wouldn't come to this," Wal-Mart spokesman Andrew Pelletier told the AP. "Despite nine days of meetings over three months, we've been unable to reach an agreement with the union that in our view will allow the store to operate efficiently and profitably."

Any success enjoyed by the Canadian union with Wal-Mart could have ultimately impacted the company's business in the U.S. One of Wal-Mart's competitive advantages is low labor costs. That was especially apparent throughout its recent foray into the grocery business, which prompted massive labor strikes across Southern California as traditional grocery chains attempted to cut health and other benefits to their workers in an attempt to compete.

"Is Wal-Mart sending a message here [about organized labor in its stores]? It's too soon to tell," said Richard Hastings, retail economist with Variant Research. "It's all about expenses, and Wal-Mart is all about expense controls. The unionization of that store ruins the expense budget for that store, so Wal-Mart definitely looks at it as something to eliminate."