Section I In the US, when most Americans think of the drivers behind the economic performance, "they immediately

think of successful tech firms such as Microsoft and Intel, or innovative financial services players such as Goldman Sachs. In fact, the improvement of retailing productivity "was the single largest contribution to productivity acceleration in the US economy." In fact the effect of retailing in any economies across different nations cannot be underestimated. The McKinsey Global Institute, through one of its global studies on what determines why some countries grow rich and others don't, concluded that "greater efficiency in retail yields greater efficiency and productivity in sectors such as manufacturing and wholesaling. This beneficial spillover effect can be further found in transportation, agriculture, textiles and more." It is not hard to imagine that retailing being the "end product" of most economic activities plays a pivotal role in a country's economic health. Because of that, retailing and all its partners in the value chain, and their ethical impact on our life is the topic of this project.

Section II Retailing, as the end point of huge amount of economic activities, is consisted of 76% of our national GDP. One of the retail giants, Wal-Mart sells in excess of $300 billion worth good annually. Supermarkets in the US sell more than $350 billion worth of food. Beyond the millions of retail outlets in the US, the enterprise entities up the value chain, wholesales, supplies, manufacturers comprise of even larger number. Wal-Mart alone has 57,000 US supplies, with more globally 20,000 in China. Understandably, retailers and their suppliers play an important role in the society, and their ethical practice would have far reaching impact in the community.

Section III Needless to say that we all consumers in one way or another. Therefore, the consumers are the key stakeholder here. Up on the value chain, retailers, wholesalers, suppliers, manufacturers, raw material extractors (miners) and all their employees are also important stakeholders. Besides consumers, an important relationship in this chain is that of retailers and suppliers. Their behavior and its ethical practice have a profound impact up and down the chain, which permeates throughout the communities we all live in. Consumers have right to safe product with accurate description of its application. Retailers and suppliers have right to make a profit. More importantly, they have the duty to protect consumers from harmful product, deceptive advertisement, because retailers have the advantage and power in the retailer/consumer relationship. The supplier has the direct duty and power to insure that manufacturers produce safe products. The dynamic of retailer and supplier can exert the most effect on the practice of the overall chain of value. Beyond that, they all have a duty to the society at large. One of the issues is sustainability producing consumer products that have the

least impact to the environment in which we all live in. Some major retailers have started taking acting and having procedure in place to promote that value. For example, Wal-Mart had a meeting with one of their major suppliers in China 1000 of them, in which they require that all Wal-Mart's suppliers and manufacturers to "become 20% more energy-efficient by 2012. Wal-Mart's goal of low price is well-known. Its executives believe that an eco-focus ultimately serves that goal. "By helping its suppliers cut waste and reduce spending on energy, Wal-Mart fully expects to see those savings passed on in lower prices." Green on the environment is good for all of us. That goes to show that when the retailers and suppliers take action, all stakeholders benefit.

Having recognizing the importance of this retailer/supplier relationship, some retail giants like WalMart, BestBuy have formed special departments to provide free know-how service to the suppliers, helping them in managing their duties in ethical practice. Social pressure coming from consumers has also pushed some retailers to exercise care in their ethical practice. Wal-Mart recently has suspended relationship with one of its seafood suppliers C.J.'s Seafood, where the working condition was cited repeatedly by OSHA for extremely long work hours up to 36 hour per shift, with 40% below minimum wages, even resorting physical violence against guest workers. Wal-Mart has declared that it would terminate the relationship if the investigation verified those allegations.

We also see some area where the retailers fail to perform their duty for the consumers, notably in the food supermarket industry. Many supermarkets, in order to maximizing the selling of the most profitable product often the less healthy food, institute a "slotting allowance" system with their suppliers. By renting out the premium shelf space to the highest bidder, the result of which is that only those suppliers of the most processed, also the least healthy food, would be able to pay the fee to display their products in those space because the profit margin of the heavily processed food is often the highest. As consumers, we have to walk the longest distance often to the back of the store, at the end of the long aisle, to reach where the fresh meat and produce are.

In the big picture of consumer world, the awareness of responsible consuming has overall helped the consumers in gaining advantage in protecting their interest in the recent years.

Section IV Many retailers have established various labeling system that require their suppliers to meet certain environmental standard. We have also seen more regulation and laws in place than decades ago.

Section V

1. More dependent consumer watchdogs that have real legal power 2. More effort from both government or industry association in helping retailers, suppliers etc. to establish procedures to manage and promote ethical practice 3. More consumer education 4. Better labeling and disclosure rules that make the entire value chain more transparent to consumers and regulatory bodies. 5. Encourage and protect whistleblowers