Walmart's Motives For Giving $25 Million To Students Draw Criticism

CHICAGO (Eunju Lie) - Wal-Mart Stores Inc and its foundation said on Thursday that it had committed $25 million to help provide food, education and jobs for children during school summer break, but opponents of the retailer's urban expansion plans questioned its motives.

The new campaign from the world's largest retailer, and the Walmart Foundation, comes after April's announcement that Wal-Mart and its foundation gave away $316 million in cash and $480 million in in-kind contributions in the fiscal year that ended on January 31. A significant part of that giving directed to local food banks.

Wal-Mart has been steadily increasing the volume of its contributions in New York City and Washington D.C., cities where no Walmart stores actually exist. Its motives for escalating donations to these cities have been questioned by neighborhood activists and labor groups.

Critics argue that the company relies on nonunion workers and has a reputation for treating them poorly, while also hurting smaller retailers.

"The mega-retailer can't boost its flagging U.S. sales unless it expands into the nation's largest cities, so it's trying to break its way into New York with new store formats and new products, and most importantly -- a new image," said Stephanie Yazgi, spokeswoman for opposition group Wal-Mart Free NYC.

Wal-Mart has countered that its stores create jobs and also bring low-priced items like groceries to so-called food deserts or neighborhoods that lack grocery stores.

"We've done polling in both cities, and residents overwhelmingly want Walmarts in the city," said Steven Restivo, Walmart's director of community affairs.

Overall, Wal-Mart and the Walmart Foundation's contributions in fiscal-year 2011 included $732 million in cash and in-kind gifts in the United States, and $66.8 million in other countries.

In May 2010, Wal-Mart also announced a $2 billion commitment of cash and in-kind contributions to U.S. food relief organizations though 2015.

(Reporting by Eunju Lie, editing by Matthew Lewis)

Copyright 2011 Thomson Reuters. Click for Restrictions.