Tuesday, November 15, 2005

Wal-Mart: Hitting the PR Wall?

The following is excerpted from "Wal-Mart Hits the Wall" an article in the the Nov. 14, 2005 issue of Newsweek magazine:

Fighting back against critics has never been the retailer's strong suit. Wal-Mart has traditionally focused on selling, not spinning; it's an orientation that stems from the views of its founder, Sam Walton. "Sam's historical posture was 'Let's do the right thing ... [but] let's not try to get publicity for it'," says Don Soderquist, Wal-Mart's former senior vice chairman. Outsiders are less charitable. Says former Wall Street Journal reporter Bob Ortega, who wrote a book critical of Wal-Mart in 1998: "There's still this thin-skinned defensiveness, like they just can't believe anybody would attack them." Last week, at a screening of Greenwald's movie in New York, the filmmaker spotted a Wal-Mart PR consultant allegedly trying to record the movie and threw him out. (Wal-Mart says he wasn't recording anything.) Even Ron Galloway, who recently produced a documentary that paints Wal-Mart in a positive light, found the company unskilled at telling its story. "They're lousy at it," Galloway says. "Wal-Mart hasn't made the case for itself."

The company believes its customers aren't paying much attention to the headlines. Its research shows only 8 percent of adults are openly hostile toward Wal-Mart, so it's wise to largely ignore opponents and instead focus on getting its 100 million-plus weekly shoppers to buy more. Outside PR experts agree that fighting back too hard can backfire, by drawing more attention to critics.

The Greenwald film mentioned here is "Wal-Mart: The High Cost of Low Price." It's director is as hostile to the company as Michael Moore is to President Bush. And as you can tell from the above, Wal-Mart is being
inundated with bad news these days.

Wal-Mart is a big target. The founding family of the company, the Waltons, are among the richest people in the world. It is the largest employer in the world. And it has been in the news quiet a lot. Most of it not positive. Union organizations like Wake up Wal-mart have sprung up to press for change, and some proposed new store locations have been scrubbed after vigorous protest from small retailers and prospective neighbors.

Needless to say, the deep-pocketed company has been sued numerous times, with issues ranging from allegations of racism to sexism. Allegations of hiring illegal aliens to clean their stores also hurt.

Even a cursory analysis of the company's present situation would indicate that a positive public relations response is required to maintain its good image - and prevent any of these issues from damaging it further. While they may look at their success as a retailer and determine they do not need public relations, Wal-Mart would be wrong in that assessment.

All companies need to be pro-active when it comes to their image even when times are good and they have a relatively good public image. In Wal-Mart's case, this is especially true, since that image has shown signs of slipping in the minds of many people in the last decade. If they don't look for ways to blunt criticism (by perhaps doing some things differently, and telling others they have made these changes) they will begin to suffer, and so, perhaps, will their bottom line.

That's bound to get their attention. But by then, of course, their image will have moved from "positive," right past "neutral" right over to "negative."

Highlighting the fact that their stores are among the biggest givers to local community groups and charities would be a good start.

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