Wal-Mart Launches PR Campaign to Bolster Company's Image
Wal-Mart Stores Inc. chief executive Lee Scott led a media charge Thursday to
counter criticism that the world's largest retailer is a behemoth that takes
advantage of its workers and stifles competition.
Scott said he wants Wal-Mart workers to know the company was speaking up for
them and he wants Wal-Mart to have a better handle on how it is perceived among
members of the public.
The company bought full-page ads in more than 100 newspapers around the nation
to highlight its message that it provides opportunity for advancement and that
its stores provide mainly full-time jobs that come with a broad benefits package.
"We want to get those myths off the table, set the record straight," Scott said
in a phone interview. He was in New York City for a round of media interviews.
But a union critic of the discount chain said Thursday the company was ignoring
social costs created by its megastores. The United Food and Commercial Workers
Union said Wal-Mart was bending the truth.
Union spokesman Greg Denier said Wal-Mart may count about three-fourths of its
workers as full time, but said those employees don't get full 40-hour weeks.
He said the health insurance the company touts is too expensive and does not
provide enough coverage for illnesses that are short of catastrophic.
Wal-Mart has 1.2 million employees in the United States, making it the nation's
largest private employer. Scott said Wal-Mart gives communities stable jobs,
and workers have advancement opportunities and benefits that include stock purchase,
a 401(k) retirement plan, discount cards and other benefits.
Scott said the company wants to take its message directly to its customers and
their communities."Customers trust us, and they want to know their trust is well placed," Scott
said.
That's true of some Wal-Mart shoppers but not most, said Jim Rice, chief credit
officer at Bernard Sands Retail Performance Monitor in New York.
"I don't think a majority of shoppers pay attention to either the charges or
to Wal-Mart's defense," Rice said. "If Wal-Mart has good selection and good prices,
they'll keep shopping."
Rice said Wal-Mart was right to respond to its detractors. "Any time you don't
answer (criticism), you're going to suffer damage," Rice
said, noting Wal-Mart often has let its critics speak and not mounted a defense. "This
will have a positive effect."
Rice said the message from Wal-Mart would help rally employees, and could resonate
in communities where Wal-Mart wants to expand. The investment community is another
matter.
"I don't think it will have a huge effect on (Wall) Street," he said.
Wal-Mart Stores Inc. fell 44 cents, to close at $53.64 on the New York Stock
Exchange Thursday.
Rice also said the assertions by Wal-Mart could generate a backlash among the
company's opponents. The UFCW has been striving for years to organize
Wal-Mart workers.
Denier said the union took issue with almost every assertion Wal-Mart made, calling
its claims "just deceptive."
Wal-Mart allows a worker to qualify for full-time benefits for working 34 hours
a week. But Denier said people who hear that Wal-Mart has 74 percent full-time
workers expect those employees to be putting in a regular 40 hours.
Wal-Mart has been the target of lawsuits accusing the company of bias against
women and not paying employees for all the hours they worked. Wal-Mart has vigorously
fought the court actions.
Joseph M. Sellers, an attorney in a gender
discrimination lawsuit against Wal-Mart
in San Francisco in which the plaintiffs want to bring in 1.6 million current
and former female workers, took issue with Wal-Mart's claims.
"It is hard to reconcile Wal-Mart's claim that it is serving everybody when it
systematically underpaid and under promoted its 1.6 million women employees for
nearly a decade," Sellers said in an e-mail.
Scott noted that the company has put in place a fresh diversity program and has
made other changes to ensure greater fairness. He also said the company was eager
to listen to its critics and will make changes when necessary.
Wal-Mart failed in an attempt last year to put a store in Inglewood, Calif.,
where the retailer lost a referendum. Critics painted the company as an unwanted
source of traffic and low-paying jobs. There
is a move in some cities to limit
Wal-Mart, Target Corp. and other big box retailers because of the sprawl they
bring.
Scott said the criticism from so many different directions has swallowed Wal-Mart's
central message. "I liken it to being nibbled to death by guppies," Scott said.
© 2004 Forbes Inc.
Index of articles and studies on Wal-Mart and big box stores
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