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Walmart

Revision as of 23:35, 15 November 2005 by Laura Miller (talk | contribs)

Wal-Mart Stores Inc. has more than 2500 stores in the U.S. and is the largest retailer in the world.[1] The Arkansas News Bureau reported that Wal-Mart only opened its Washington D.C. office in 1999. According to Washington Representatives as of November 2005, Wal-Mart had eight in-house lobbyists at its D.C. office and employed 11 outside consulting firms for federal lobbying work.

Contents

Wal-Mart Speak

Wal-Mart, in common with many businesses, calls its employees "associates", considered by some to be an example of doublespeak.

In company founder Sam Walton's autobiography Sam Walton: Made In America, Walton recalls that James Cash Penney referred to hourly employees as "associates," but the specific inspiration for Wal-Mart's use of the term came from a sign Walton and wife Helen encountered at a British retailer during a tennis vacation in England.

At the time Walton was concerned with providing employees with more equitable treatment within the newly-public company, and in 1971 introduced a profit sharing plan for all associates.

Wal-Mart's Warts

The New York Times reported in January 2003 that an internal Wal-Mart audit done in 2000 warned executives that "employee records at 128 stores showed extensive violations of child-labor laws and state regulations that require workers to be given time for breaks and meals." [2]

On November 2, 2004, USA Today reported that "Election Day is a lousy shopping day." But Wal-Mart attempted to appeal to the politically-minded bargain shopper by showing live Fox News election coverage at its 2620 stores. The goal is "to keep shoppers and employees informed," according to Charlie Nooney, CEO of Premier Retail Networks, which provides Wal-Mart's in-store TVs. But Wendy Liebmann, the president of WSL Strategic Retail, said that "Wal-Mart may be showing a Republican point of view to shoppers" by running Fox News. "Most retailers tend to keep political affiliations to themselves," she commented. [3]

On April 8, 2005, the Wall Street Journal reported that Wal-Mart vice-chairman Thomas M. Coughlin, an "old hunting buddy of founder Sam Walton and for five years the second-highest-ranking executive," may have falsified expense reports totaling between $100,000 and $500,000. Coughlin's "total compensation topped $6 million" in 2004. The shady transactions were of particular interest because "Coughlin told several Wal-Mart employees that the money was actually being used for antiunion activities, including paying union staffers to tell him of pro-union workers in stores." [4]

According to the Wall Street Journal, "If Mr. Coughlin did pay union staffers for information, it would represent a criminal offense under the federal Taft-Hartley Act and ratchet up debate over the retail giant's labor policies." Coughlin supporters claimed "the payments went to former, rather than current, union people who had information about union activities at Wal-Mart." However, a former general counsel of the National Labor Relations Board said even payments to former union employees "could violate the National Labor Relations Act and carry civil penalties." [5]

In a statement, Wal-Mart spokesperson Mona Williams said the company's investigation "found no evidence whatsoever" of anti-union payments, adding, "The evidence shows that corporate funds were misappropriated and used for the personal benefit of specific individuals." Williams said, "Neither Mr. Coughlin nor anyone else at Wal-Mart was ever authorized by the company to make payments to anyone about union activity." [6]

Open Communication, but No Unions

In November 2004, PR Week reported that the United Food and Commercial Workers union is engaged in an ongoing, multi-year campaign to organize employees at seven Wal-Mart stores in Canada. One UFCW employee said the union is trying "do everything quickly and quietly," in order to "stay under the company's radar as long as possible." The UFCW campaign did unionize the first Wal-Mart store ever, in Quebec in 2004 (see below). [7]

In response, Wal-Mart launched an anti-union internal communications program called "Setting the Record Straight." The program involved disseminating "statistics and independent studies" to Canadian Wal-Mart employees that "dispute assertions made by critics, such as 'Wal-Mart will provide "dead-end," poor quality jobs' and 'Wal-Mart is an American company that does nothing to support Canada.'" Wal-Mart's official position on unions is that they are unnecessary "because we believe in maintaining an environment of open communications." As PR Week reported, "Wal-Mart plans to fight the UFCW at every step." [8]

In February 2005, Wal-Mart announced it was closing a store in Quebec where workers were negotiating the first union contract ever with the giant retailer. "Wal-Mart Canada spokesman Andrew Pelletier said the company is not trying to bust the union," wrote the Ottawa Citizen. Pelletier said, "This store could easily have closed months ago and we didn't do that. We made a determination we were going to bargain [with employees] in good faith." [9]

The Quebec store's 200 employees received accreditation with the United Food & Commercial Workers Canada union in summer 2004. They had been negotiating "since last October to reach a collective agreement" with store management. The same day that Quebec Labour Minister Michel Despres granted the UFCW workers binding arbitration on the contract, Wal-Mart announced that the store would be closed in May 2005. "It's a business decision, it's an economic-viability issue ultimately, but it's been exacerbated through added pressures," said Pelletier, referring to union demands for more workers and more work hours. [10]

Following the announcement of the store closure, O'Dwyer's reported, "Wal-Mart's in-house corporate affairs team is handling PR with help from Canadian firm National PR. ... National PR's Toronto and Montreal offices are assisting with the work, including French-language media outreach." [11]

Opposing Wal-Mart

Community opposition to Wal-Mart reportedly is growing. On April 6, 2004, voters in Inglewood, California, rejected by a 2-to-1 margin a Wal-Mart-funded ballot initiative which would have voided multiple local regulations to allow Wal-Mart to build a new supercenter. "After announcing last year it would build 40 supercenters in California, the chain has opened only one unopposed - in La Quinta, a desert community 200 miles east of L.A." [12]

Wal-Mart's response to the defeat - after it spent more than $1 million in PR for the Inglewood referendum - was remarkable for its dismissal of the democratic process. "We are disappointed that a small group of Inglewood leaders together with representatives of outside special interests were able to convince a majority of Inglewood voters that they don't deserve the job opportunities and shopping choices that others in the LA area enjoy," Wal-Mart told PR Week.

Public Relations Campaigns

Putting the PR in NPR

In August 2004, the New York Times reported that Wal-Mart, "stung by criticism of its labor practices, expansion plans and other business tactics, is turning to public radio, public television and even journalists in training to try to improve its image." Wal-Mart's new media-related philanthopy includes National Public Radio sponsorship, underwriting the popular "Tavis Smiley" talk show, and "plans to award $500,000 in scholarships to minority students at journalism programs around the country, including Howard University, University of Southern California and Columbia University."[13].

Mona Williams, a spokesperson for Wal-Mart, said the company had "no hidden agenda," although it has not supported journalism in the past. "We've really been in the spotlight and I think that's made us especially sensitive to the need for balanced coverage," Williams said. "It doesn't matter if the subject is Wal-Mart or something else. You just aren't going to have that unless different perspectives are represented." NPR's underwriter announcements for Wal-Mart include a claim that the store brings "communities job opportunities, goods and services and support for neighborhood programs."[14]

Williams said that the recipients of the scholarships will be invited to appear at guests in the audience at the next years annual general meeting.

In response to listener complaints, NPR ombudsman Jeffrey Dvorkin wrote, "Wal-Mart has been embroiled in anti-union controversies, accusations about its low-paid workers, the hiring of undocumented workers and the homogenizing effect of Wal-Mart in smaller communities. To its credit, NPR has reported this on a number of occasions. Some listeners wonder if Wal-Mart was motivated to purchase underwriting on NPR in an attempt to counteract that reporting. ... Wal-Mart symbolizes values that some listeners believe to be antithetical to the values of public radio."[15]

Telling Their Side of the Story

In September 2004, Wal-Mart CEO H. Lee Scott compalined, "We have not gotten our story out to the extent that we need to." [16] The head of the global super store told a retailing conference that Wal-Mart's bad reputation came from newspapers and television.

However, a New York Times editorial responded that "if Wal-Mart wants to improve its image, it should focus less on shaping its message and more on changing the way it does business. ... These damaging news stories are not a product of bad spin, but bad facts. If Wal-Mart wants to do a better job in telling its story, it needs to work on having a better story to tell." [17]

PR Week reported that Wal-Mart is expanding its media relations team. "There's an acknowledgement throughout the company of the importance of using the media to tell our story," a company spokesperson said. "We're now putting more resources behind doing that." [18] Trade publication O'Dwyer's PR Daily call Wal-Mart's media department, asking for comment on the Times editorial. But the company said it had not decided whether or not to respond.[19]

Sam Walton started the Walton International Scholarship Program in 1985 to stem the tide of communism in Central America, and promote capitalism and privatization.[20]

Challenging "Urban Legends"

Following disappointing Christmas 2004 sales, Wal-Mart launched a national PR blitz in January 2005. "We want to set a tone going into our fiscal year that starts Feb. 1, that Wal-Mart Stores is going to be aggressive in taking care of customers, taking care of our associates, communications and merchandising. It's just the tone that we want to set," explained CEO H. Lee Scott. [21]

The campaign, assisted by Hill & Knowlton, included full-page "open-letter" ads in more than 100 newspapers, a new website, walmartfacts.com, and extensive radio, TV and newspaper interviews with CEO Lee Scott. "For the first time in its 43 years, a Wal-Mart CEO is publicly responding to detractors," noted USA Today. [22]

Scott alleged that mounting criticisms of the retail giant's labor practices, subcontractors and economic impact on communities were "becoming almost an urban legend." He added, "One of the things that strikes me is so many of the critics are people whose lifestyle doesn't change when the price of fuel changes, or if they keep a Wal-Mart store out of their area. They don't need competition. In some ways, people forget about average working people, and how they live their lives." [23] Wal-Mart's newspaper ads struck a similar tone, saying the company's critics "are working only for themselves" while Wal-Mart "is working for everyone." [24]

In an interview with USA Today, Scott said that walmartfacts.com will offer the "unfiltered truth" about the company and its impact on local communities. When asked why the new website doesn't include information on the class-action sex discrimination lawsuit against Wal-Mart, Scott responded, "We didn't leave it out for a particular reason. There are so many things that we deal with and aspects of society that you couldn't possibly put all of them in." [25]

Wal-Mart spokeswoman Beth Keck declined to reveal to the Globe and Mail what the cost of the campaign was preferring to describe it as being an "appreciable amount". "We've never been a company that puts a lot of resources into glitzy public relations ...But with size comes attention . . . We needed to do a better job of protecting our associates," she said.[26]

Wal-Mart's PR Sprawl

According to spokesperson Mona Williams, in 2004 Wal-Mart began "to put corporate communications people in key cities and areas of the country where it operates." In April 2005, former director of public relations Gus Whitcomb was apparently demoted to regional corporate affairs director, in Dallas, Texas. Whitcomb's previous position was subsequently upgraded to "senior director of PR." The position remained unfilled, as of April 11, 2005. [27]

Wal-Mart's other regional corporate affairs / PR directors are located in San Francisco, Phoenix, and Washington, DC. The regional PR heads report to vice-president of field corporate affairs Carol Schumacher. [28]

Also in April 2005, O'Dwyer's PR Daily reported that Wal-Mart hired the New York PR firm The Marino Organization. Marino focuses "on the real estate and land development sector," and counts among its clients "Home Depot, Hudson Yards Coalition - a group which supports a controversial stadium on Manhattan's West Side - and Brooklyn Bridge Development Corporation." [29]

Wal-Mart increased in New York-area PR efforts, after being "dropped from a development push in Queens" in February 2005. Marino, reported O'Dwyer's, "Marino has been touting a Wal-Mart-sponsored survey in New York - surveys are a favorite PR tactic for the retailer." Survey results include that 62 percent of respondents said they would "welcome the retailer," 69 percent said "they thought Wal-Mart stores create jobs," and 75 percent "thought Wal-Mart's stated wage of $10.38/hour in metropolitan areas is 'fair and decent'." [30]

On a national level, Wal-Mart receives PR assistance from Fleishman-Hillard and Hill & Knowlton. [31]

The Hurricane Katrina Halo

"Wal-Mart Stores Inc. is enjoying its best publicity in years as even its harshest critics laud the retailer's Hurricane Katrina relief efforts," reported Reuters in mid-September 2005. Following the hurricane which devastated several U.S. Gulf Coast states, the retailer promptly made significant contributions to relief efforts, including a $20 million cash donation, 15,000 truckloads of merchandise, 100,000 free meals, mobile pharmacies, and "the promise of an unconditional work transfer for all displaced employees," according to PR Week. CEO H. Lee Scott said Wal-Mart's generous response "had nothing to do with getting good press," but: [32]

Stories of the company's generosity and reports of 11,000 people lining up for 400 jobs at a new Wal-Mart in Oakland, California, have helped turn the tide on the barrage of bad news that has dogged the retailer for years. "Those stories become harder and harder to spin to the negative," Scott said.

At this time, Scott also "started to drop hints about a secret spin strategy to counter a union-backed, anti-Wal-Mart media blitz that he says is not going to go away," reported Reuters. While neglecting to reveal details of the campaign, Scott said in one speech, "It is not a matter of Wal-Mart just needing to hire public relations people. ... This is a significant issue that we face and has to be dealt with ... internally, in the company, without allowing our plans to be public." [33]

According to Wal-Mart spokesperson Mona Williams, "This isn't simply a public relations strategy to pretty up an image. ... Rather, it is an energetic attempt to tell our story and also become a better company in the process." An organizer with the "Wake-Up Wal-Mart" campaign critiquing the retailer countered, "If Wal-Mart chose to do the right thing every day, they wouldn't need a super-secret public relations strategy." [34]

Corporate crisis specialist and PR executive Eric Dezenhall cautioned Wake-Up Wal-Mart and other critics such as Wal-Mart Watch from criticizing the giant retailer so soon after its Hurricane Katrina donations. Dezenhall said, "I think that the timing is not ideal for Wal-Mart attackers right now, while (Wal-Mart) is enjoying a much-needed halo. It strikes me as a rather graceless time to launch an attack because it's just a matter of time before this halo burns off. If I were Wal-Mart, I would be glad that my adversaries were attacking in this cycle." [35]

Engaging in the Debate Over the Economic Impact of Wal-Mart

In November 2005 Wal-Mart "unveiled a new weapon ... the most comprehensive study to date on the retailer's impact on the U.S. economy." The study, paid for by Wal-Mart and conducted by Global Insight, concluded the retailer saved the average American $2,329 and created 210,000 jobs in 2004. It also tied a 2.2 percent wage decrease to Wal-Mart, but claimed the "nominal" fall was offset by lower prices. The study didn't address employee benefits or working conditions. [36] The study was one of 10 papers presented at a Washington DC conference sponsored by Wal-Mart, with "five of them at least somewhat critical of Wal-Mart's ruthlessly low-cost business model," reported the Wall Street Journal. Wal-Mart's Bob McAdam said that while "some conclusions might not be favorable ... if everything was one-sided, it would not be credible." Asked Tracy Sefl, of the activist group Wal-Mart Watch, "Will they act on any of the studies that show they have negative effects on a community?" [37]

Charm Offensive in New York

"Wal-Mart has begun a media relations and community outreach effort to improve its image [in New York City] as it seeks future sites for local stores," PR Week writes. "The retailing giant has begun advertising in community papers across the city and plans to expand those ads to the ethnic press, radio, and television." Working with the New York-based PR firm The Marino Organization, Wal-Mart has spoken with journalists from several NYC papers and "is seeking meetings with the presidents of New York's five boroughs and with other community leaders," PR Week reports. [38] The company has hoped to open new stores in Staten Island and Queens, but so far as encountered community resistance.

Wal-Mart the Culture Police

"Wal-Mart, America's largest retailer, prides itself on being a 'family-friendly' store, with smiley faces guiding stressed-out breadwinners to a land of low-cost, guilt-free consumption," writes Amy Schiller. But it has become "the self-appointed culture police by screening the music, books and magazines that many Americans will be able to access. ... Take, for example, Wal-Mart's refusal to sell Sheryl Crow's self-titled album in 1996, citing objections to a lyric that criticized Wal-Mart for selling handguns. ... The huge bestseller, America: the Book, featuring Jon Stewart, Stephen Colbert, and the rest of the Daily Show crew, was banned from Wal-Mart in 2004." Wal-Mart also refused to carry Robert Greenwald's documentary, "Uncovered: The Whole Truth About the Iraq War." Even "something as potentially broadly appealing, positive, and utterly non-offensive as a T-shirt reading 'Someday a woman will be president' was pulled from the sales floor because 'the message goes against Wal-Mart family values.'" [39]

Personnel

Regional corporate affairs / PR directors:

  • Gus Whitcomb, Dallas, Texas
  • San Francisco, California
  • Phoenix, Arizona
  • Washington, DC

Books, Reports & Films

Wal-Mart's PR Companies

Contact info

Wal-Mart Stores, Inc.
Attn: Customer Service
702 S.W. 8th Street
Bentonville, AR 72716
Phone: 1-800-WALMART (1-800-925-6278)
Web: http://www.walmart.com
and: http://www.walmartfacts.com

External Links

Undated

  • This useful index of articles on Wal-Mart includes many critical commentaries, but also factual studies and reporting from a neutral or pro-Wal-Mart view.
  • "Wal-Mart Watch." Activist web site founded with money from the Service Employees International Union, the biggest union in the United States.

2003-2004

2005

22]", TomPaine.com, November 9, 2005.

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