Wal-Mart Works to Polish Image, but Detractors Gear Up Too
In a hotel meeting room not far from Wal-Mart Stores Inc.'s headquarters, company executives told a gathering of 70 reporters Tuesday that Wal-Mart was working hard for working families.
Nearby, union organizers and other foes trotted out statistics, current and former Wal-Mart employees, and community leaders to try to prove that the company is a bane to those same families.
The dueling messages were aimed at the reporters attending Wal-Mart’s second annual media conference.
For the executives, managing the steady drumbeat of negative news is consuming almost as much of their time as running the company, which has more than 6,500 stores in 16 countries and nearly $316 billion in annual sales. The past year in particular has been brutal.
“It’s been an extremely trying year when the chief executive of the world’s largest retailer has to devote himself full time to defending the company’s business model,” said Mark Husson, an analyst with HSBC Securities in New York. “By any measure it’s an extraordinary amount of very senior management time being taken up in a noncommercial, unproductive manner.”
Increasingly keen to change public perceptions, Wal-Mart again opened its doors to the media as it continues its global expansion. This year’s conference, which concludes today, is a series of meetings featuring top Wal-Mart executives extolling the company’s virtues.
“In the past, we’ve been forced to respond to criticism, but in the last year, we’ve taken a more proactive approach to sharing information and our critics have had to respond to us,” said Wal-Mart spokeswoman Sarah Clark. “With success comes criticism, but we know if we didn’t tell our story, no one else would and we didn’t want to let our critics define our reputation.”
Wal-Mart certainly has had its hands full, having to contend with:
* A leaked memo that outlined proposals to trim the company’s healthcare costs by discouraging unhealthy workers.
* A scathing anti-Wal-Mart documentary that screened nationwide in churches, living rooms and schools.
* Farmers, bankers and rural Americans who raged against the company’s proposal to open a limited-purpose bank to save money on credit card transactions.
* State houses around the country which debated forcing the company to pay more for employees’ healthcare or pay into state funds for that purpose.
The company has fared no better on Wall Street, where its stock has been relatively unchanged for the last 6 1/2 years. Shares of Wal-Mart rose 58 cents Tuesday to $46.40.
The trying times are taking their toll on Chief Executive Lee Scott, who has been traveling the globe fending off attackers. He recently said he would take a month off to go fishing.
Among those coming to Wal-Mart’s defense Tuesday was Arkansas Gov. Mike Huckabee.
“Wal-Mart has really become the whipping boy of labor unions across the country who would love to demonize the Wal-Mart brand and the Wal-Mart culture,” Huckabee told the gathering. “Wal-Mart would tell you they’re not a perfect company. But one of the reasons they’re successful is that they reinvent themselves every week.”
Former U.N. Ambassador Andrew Young, chairman of the 16-member steering committee of Working Families for Wal-Mart, said at a small news conference that none of the problems affecting the poor were caused by the company.
“We all have an interest in Wal-Mart; we all want Wal-Mart to succeed,” Young said, gesturing at his fellow committee members who came to Arkansas from around the country. “We don’t think it ought to be trashed. We think it ought to be perfected.”
Part of what Wal-Mart is battling is better-organized opponents. Two of its biggest detractors are Wal-Mart Watch, backed by the Service Employees International Union, the Sierra Club, the National Partnership for Women & Families and other activist groups, and WakeUpWalMart.com, funded by the United Food and Commercial Workers union.
Like Wal-Mart, those groups are fine-tuning their message for the coming year.
Andrew Stern, the founder of Wal-Mart Watch and the president of the Service Employees union who last year broke his and six other unions away from the AFL-CIO, said the next step was moving from a campaign-type organization to a permanent one.
“We spent a year trying to be heard, trying to make our case, trying to get legislators, businesspeople and reporters to pay attention to what we thought was a big problem in the American economy,” Stern said. “Now we are looking at how we can provide very specific ways for helping Wal-Mart change its business model, instead of being perceived as just being critics.”
To that end, Wal-Mart Watch is likely to ask the company to work more closely with local leaders to minimize the environmental and traffic problems associated with new stores. Also on the agenda: challenging Wal-Mart to set an example for the retail industry by providing affordable health insurance to all employees.
WakeUpWalMart.com continues to push similar demands, including paying a “living wage,” offering affordable health coverage and increasing the amount of U.S.-made products it sells.
On Tuesday, the group set up camp steps away from Wal-Mart’s meeting hall, flanked by workers describing their experiences with the company.
“I’m here because I can think of 100 people offhand -- single mothers -- who are forced to go on public assistance because Wal-Mart, which could afford to give people health insurance, chooses not to,” said Greg Pierce, a 29-year-old from Ocala, Fla., who quit working at Wal-Mart a week ago.
Wal-Mart isn’t the first American company to face withering attack by a groundswell of organized opposition and individual critics.
Standard Oil Co.'s dominance in a host of enterprises provoked widespread public outcry in the early years of the 20th century. Henry Ford, came under intense criticism in the late 1930s for heading the only nonunion American carmaker. In more recent years, Nike and Gap faced a barrage of criticism, particularly on college campuses, for what critics said were sweatshop conditions at its overseas factories.
Each company mostly or partly won over opponents after instituting change -- either voluntarily or by force, said Nelson Lichtenstein, a professor of history at UC Santa Barbara and editor of “Wal-Mart: The Face of 21st Century Capitalism.”
Standard Oil fell to the new antitrust laws demanded by the American public. Ford unionized, and Nike and Gap opened themselves and their factories up to inspection, review and oversight by independent observers.
If history is any guide, Wal-Mart probably will be forced to make changes as well, Lictenstein said.
“If they see that the political winds are moving against them, if the Democrats win big or something, then they’ll start to deal,” he said.
At Tuesday’s media gathering, normally tight-lipped Wal-Mart executives took questions and described their efforts to remain relevant to the hundreds of millions of shoppers who pass through their doors each week.
Those plans include offering trendier and more-upscale merchandise; working with communities to design stores that better fit in with local architecture; employing local contractors and suppliers -- particularly minority-owned businesses -- to broaden the company’s appeal in urban areas; and offering healthcare coverage for as little as $20 a month for families.
“One visit to Arkansas to be lectured on how America is better off with Wal-Mart isn’t going to change anything, but if they’re doing a whole raft of things, then Wal-Mart starts to look proactive and progressive rather than reactive and regressive,” said analyst Husson. “If that’s the strategy there is a tipping point where we get to where enough of that stuff will move public opinion and may even move press opinion.”