Wal-Mart hopes to roll back criticism with media event

April 07, 2005|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Wal-Mart Stores Inc. invited dozens of reporters from around the world to its Bentonville, Ark., headquarters this week in an unusual media event to defend itself against negative headlines.

It had no lack of them to counter.

The company recently agreed to pay $11 million to settle allegations that it widely used illegal immigrants as janitors. It faces discrimination lawsuits from female workers. Labor unions are fighting it, even trying to get the ABC television network to drop the company as a sponsor. Historic preservationists finger it for threatening the whole of Vermont. And in Maryland, the state Senate approved a tax on large employers who fail to meet a standard of health benefits for their workers -- a new law clearly aimed at Wal-Mart, the only company it would affect.

"I think that somehow, there is an obsession in America to take down the big guy," said Britt Beemer, owner of America's Research Group, a Charleston, S.C., retail analyst that tracks shopping patterns. "Wal-Mart becomes an easy target for a lot of people for the fact that they're so high-profile."

Size is an important factor when it comes to targeting corporate bad guys.

From John D. Rockefeller's Standard Oil Co., which triggered the creation of antitrust laws, to big tobacco executives being summoned to Capitol Hill, to regulators' pursuit of Bill Gates' Microsoft Corp. across continents, a select few companies rise up to become the face of corporate avarice even as their businesses thrive. Fortune magazine just ranked Wal-Mart as the biggest U.S. company for the fourth year running. Its $285 billion in annual sales can make or break the largest suppliers -- even entire industries, such as the toy market.

The company Sam Walton founded as a country general store in 1962 has faced criticism over the years, particularly as it and other "big box" stores overwhelmed small independent operators and blitzed small-town Main Streets.

But the criticism has amplified as the company has expanded into major markets during the past decade, where opponents are more organized, in greater numbers and more pro-union. Residents in Inglewood, Calif., voted down a planned Wal-Mart last year out of concern that low wages wouldn't help their community.

Wal-Mart was slow to react to the criticism, analysts said, operating under the philosophy that if it gave customers what they wanted, negative publicity wouldn't affect business.

"I don't think they fought enough," said Doug Fleener, president of Dynamic Experiences Group, a Massachusetts retail consultant. "They let others control their story. There's two sides to every story, and I don't think that they did a good job telling theirs."

Fleener pointed to the more rapid reflexes of Starbucks Corp., the ubiquitous coffee chain. Starbucks quelled criticism two years ago by agreeing to pay above-market prices to buy coffee beans from small farmers, and it established programs to improve the quality of life and capital lending for coffee growers.

Wal-Mart's two-day media event, which ended yesterday, attracted about 50 reporters from the United States, Japan, the United Kingdom, South Korea and Germany. It is part of a broader effort by the company to address criticism against it, said Gus Whitcomb, a spokesman. Reporters met with executives, including Chief Executive H. Lee Scott Jr.

Scott, according to various news accounts, said that when Wal-Mart opens a store, it gets 10 times more applicants than it has jobs, and it gives shoppers what they want -- low prices. As for higher wages, he said the company couldn't pay its 1.3 million employees more because of thin profit margins in a competitive market.

"We looked at this as an educational opportunity," Whitcomb said of the press event. "We wanted journalists to have a chance to come into our company and learn who we are as a business, how we do business and meet our senior executives as human beings."

The company also took out full-page advertisements in more than 100 U.S. newspapers, including The Sun, in January to counter criticism that it pays workers less and offers fewer benefits than competitors, and it created a Web site, www.walmartfacts.com.

"One of the things we've seen is we're not out there telling our story," Whitcomb said. "Our associates have come to us and said why are you letting other people tell our story, especially since it's not the right story. We want to give people the facts and let them make an intelligent decision for themselves."

But the opposition has promoted its side of the story. The United Food and Commercial Workers International Union launched a Web site, www.wakeupwalmart.com, to criticize what it calls unfair labor practices by the company.

"Americans are waking up to these high costs," said Paul Blank, who directs the union's Wal-Mart campaign. "It's only recently that we're starting to learn just how negative the impact has been -- not just on workers, but on communities."

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