The public-relations disaster visited on Wal-Mart Stores lately is serious and is approaching the point that it threatens the company's ability to roll out stores at the rate it wants.
There's no need to recount all that has happened recently. It will suffice to summarize that the company has been denied building sites, has experienced unremitting labor difficulties, is facing increasingly formalized opposition consortiums, and has been obliged to show top-level executives the door because of alleged ethical lapses.
However belatedly, Wal-Mart has awakened to the fact that its traditional means of dealing with the media, namely to say nothing, is not quite the strategy to have when the going gets tough. Even a company the size of Wal-Mart may need a friend from time to time. So just this year, Wal-Mart unleashed a blitz of newspaper ads intended to burnish its image. Many of them aim to sell the proposition that its wage and benefit structure is attractive.
On top of that, Wal-Mart tried a new tactic last week by convening an unprecedented two-day media conference in Rogers, Ark., not far from company headquarters. Some 100 news organizations were invited to send representatives to the event, of which about half did so. SN was represented there by Katherine Bowers, New England editor for Fairchild Publications. Fairchild is SN's parent. I spoke to Katherine midway through the event to see how it was going. The question was prompted by the fact that some media outlets were not too charmed by restrictions put on reporters, chiefly that there were no individual interviews permitted and that no photography was permitted. The conference format featured several formalized speeches delivered by executives. Each then entertained questions from the group of reporters for a limited period.
How did that work out? Katherine said the event failed to offer all the access desired, but that it nonetheless was a good "first step" in Wal-Mart's goal of making better friends with the media, and a useful "middle ground" that offered something. In short, the event offered little new information, but was a useful telling of Wal-Mart's current story.
She asserted that H. Lee Scott, Wal-Mart's chief executive officer, was particularly graceful in accepting and answering tough questions from reporters. Thomas Schoewe, chief financial officer, also made a skillful presentation of Wal-Mart's financial situation and didn't shy from questions. Least skilled was Mike Duke, president and CEO of Wal-Mart's U.S. Division. He sidestepped queries with a standard answer to the effect that "all we need to do is take care of our customers and all will be well." Many of Wal-Mart's woes spring from the fact that until recently, Wal-Mart fought all battles on the basis of bringing low prices and employing workers at relatively slight wage rates, but in large numbers.
That's the very message that is clearly insufficient to carry Wal-Mart forward. Also insufficient is such a tightly controlled media event. Let's hope that in the future the company will exhibit the confidence to tell its story in a more generous way.