Wal-Mart Fights Criticism From Labor
Wal-Mart Defends Practices, Fights Criticism From Labor and Rivals at First Media Conference
The Associated Press - April 5, 2005
By Anne D'innocenzio

Wal-Mart is "good for America" and the barrage of criticism against the company is an effort to protect the status quo in retailing, President and CEO Lee Scott said Tuesday in a sharp attack on community activists, organized labor and retail rivals.

Addressing about 50 journalists gathered this week at the company's conference its first ever media event Scott defended its wages and health care plans, criticized by labor groups as inadequate, and said that the company is able to save customers big money as it drives costs out of its system.

"Innovation and competition tend to change the status quo," said Scott, speaking at a hotel in Rogers, a few miles from Wal-Mart Stores Inc.'s Bentonville headquarters.

The two-day conference is part of a stepped-up public relations campaign begun last year to burnish Wal-Mart's image and counter views that the world's largest retailer and nation's biggest private employer skimps on wages and benefits while filling America's suburbs with boxy warehouses and acres of parking lots. On Tuesday, company spokeswoman Mona Williams urged reporters to clear their minds of previous articles about the company and "start with a clean slate."

Wal-Mart has a lot at stake. Company officials acknowledged that negative publicity has probably been a factor for its depressed stock price, and they say they will become more aggressive in disseminating their story about the company.

As part of the overall campaign, Wal-Mart officials also plan to improve the shopping experience by offering more fashionable apparel and trendier storage containers. It also vowed to be more offensive in its public relations tactics and to be more aggressive in price cuts.

The conference comes as controversy surrounding the world's largest retailer seems to have reached a crescendo. Wal-Mart has long been criticized by community leaders, religious groups, and environmental activists for taking advantage of its workers and hampering competition, but recently it has had to face very public legal problems.

Wal-Mart recently announced it was paying a fine to settle federal charges that underage workers operated dangerous machinery, and agreeing to pay $11 million to settle charges that its cleaning contractors hired illegal immigrants.

Meanwhile, the company is appealing a judge's decision to certify class action status for up to 1.6 million female employees who claim Wal-Mart discriminated against them because of their gender.

Some of Wal-Mart's most vocal critics aimed to use the media event to blast the company's wage and health care policies.

A group of community leaders from Inglewood, Calif., a Los Angeles suburb that rejected a Wal-Mart super center a year ago, held a news conference earlier Tuesday at the hotel asking the company to sign what it calls a "community benefits agreement" that would guarantee good wages, affordable health care and protections for small businesses.

The United Food and Commercial Workers International Union also announced Tuesday that it planned a new Web site called wakeupwalmart.com as part of an invigorated campaign to make Wal-Mart offer what it considers more adequate wage and health care programs.

"There has to be a limit to greed when you talk about people's lives," said Paul Blank, director of the union's Wal-Mart campaign.

Tom Schoewe, Wal-Mart's executive vice president and chief financial officer, also attempted to "demystify" Wal-Mart's business, saying that same-store sales, or sales at stores opened at least a year, do not tell the whole story.

The company's same-store sales have been slowing over the past few years, but he said that it is mainly due to the company's practice of adding several stores in the area. That clustering takes away sales from the original store, but at the same time increases Wal-Mart's market penetration. Total sales, he said, have consistently increased in the double digits.

Associated Press Writer Chuck Bartels contributed to this report.