Handshake With Sam
While Wal-Mart’s founder, Sam Walton, steered his company’s growth over its first thirty years, he never let anyone forget that with such tremendous success come certain moral responsibilities. He led by example, and he did business with a handshake.
Today’s Wal-Mart has lost Sam’s way. That’s why we’ve proposed a new contract with Wal-Mart’s current leadership—to help Wal-Mart take its place as a responsible business leader for the new century.
CNBC on Wal-Mart’s Sales Strategy
Posted by Alex Goldschmidt
Wal-Mart continues to rely on price cuts to remain profitable, a strategy which concerns some financial analysts. After reporting its sales for the fourth quarter of 2007 today, Wal-Mart blamed “the economy” for slow store sales. CNBC, however, suggests that the weak economy means Wal-Mart should be seeing MORE sales as cash-strapped consumers resort to Wal-Mart. The retailer’s low prices continue to be its sole strong point, but as customer service and product quality declines at the company, some consumers are getting fed up with what Wal-Mart has to offer.
Wal-Mart’s Growth Practices Remain Unsustainable
Posted by Alex Goldschmidt
As Wal-Mart’s sales growth hovers just barely above the zero mark, BusinessWeek examines the company’s growth strategy. Among the company’s problems: poor customer service, reliance on low-margin items and market saturation. The company plans to remedy much of this by expanding overseas, but as the article points out, Wal-Mart’s usual strategy of “cheap stuff and lots of it” doesn’t always work in foreign markets. More broadly, Wal-Mart still struggles with alternate formats. The retailer still has problems with apparel sales, and “people are still going in there to “save money” on basics, but going elsewhere for the ‘live better’ part of the equation.”
Wal-Mart: Fashioning a New Growth Track [BusinessWeek]
On Feb. 19, the world’s largest retailer, Wal-Mart Stores, reported sales of $374.5 billion—more than a third of a trillion dollars—for its fiscal year ending Jan. 31, 2008. It’s a stunning number. But a closer look at Wal-Mart’s prospects shows the larger question for the discount giant is whether it can avoid having store-sales growth turn negative in the coming year, for the first time ever.
The numbers the behemoth has reported for its latest fiscal year already reveal evidence of a slowdown. Its Wal-Mart stores division eked out a sales increase of 1% in stores open at least one year, the smallest sales gain in company history. That follows a 1.9% gain in 2006. (Total revenue increased 8.4% for the latest quarter, to $107.4 billion; net income rose 4%, to $4.1 billion, or $1.02 a share.) At this pace, it’s obvious Wal-Mart will have to fight flat or negative same-store sales growth in the coming year.
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Toy Safety Concerns Persist at Wal-Mart
Posted by Alex Goldschmidt
Concerns about toy safety took a big bite out of holiday sales this year, and toy makers are working to reassure consumers. This video from CNN discusses the industry’s efforts, and how toy makers are using safety as a selling point.
The story comes out on a day when CPSC director Nancy Nord chastised the toy industry for ineffective safety procedures. Nord placed the bulk of the blame for unsafe toys on manufacturers, but retailers like Wal-Mart and Toys ‘R’ Us play a major role in the problem. Both companies have announced plans to increase toy safety standards, effectively mandating industry-wide changes.
These moves seem to avoid the real root of the problem. Wal-Mart’s toys are already failing to meet the company’s requirements, and raising standards won’t address the fact that toys are produced in fly-by-night factories and too often not tested for chemicals. Toy makers should be testing toys more frequently and more thoroughly, a process which Wal-Mart has said little about. As it stands, Wal-Mart relies on a single laboratory for its product safety testing. The lab - Consumer Testing Laboratories in Bentonville, Ark. - is paid by Wal-Mart for its services, raising some questions about the lab’s objectivity. Not only has Wal-Mart failed to address these ethical problems, it has also neglected to increase or improve its testing practices.
Wal-Mart, Toys ‘R’ Us unveil new safety rules [CNN Money]
Wal-Mart Again Ranks Lowest in Customer Satisfaction Survey
Posted by Alex Goldschmidt
For the second time in three years, Wal-Mart scored the lowest of any retailer on the American Customer Satisfaction Index from the University of Michigan. Wal-Mart’s customer service has been the subject of both outrage and ridicule, as the company has gained notoriety for its disgruntled employees. Wal-Mart’s personnel practices only compound problems with store format and product quality. Low wages, poor health care, erratic scheduling for store employees and years of union-busting have made Wal-Mart a leader in employee turnover and, now, poor customer service.
Wal-Mart Ranks Lowest Among Discounters in Survey [Bloomberg News]
Wal-Mart Stores Inc. ranked lowest among U.S. discounters and department store chains in an annual survey of customer satisfaction as shoppers said they found less value in the world’s largest retailer’s prices.
Wal-Mart fell to 68 from 72 last year on a scale of 1 to 100, according to the University of Michigan’s American Customer Satisfaction Index, released today. Minneapolis-based Target Corp., the second-largest discounter, held steady at 77. The average score for department and discount stores was 73, the lowest since 2001.
Customers may be increasingly dissatisfied with the goods Wal-Mart is carrying, said Claes Fornell, the professor who led the study. Chief Executive Officer H. Lee Scott has turned the company’s focus back to groceries and household items after an ill-fated attempt to boost sales by luring fashion-conscious shoppers with silk camisoles and distressed jeans.
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Friday Blog Round-Up: Happy Valentine’s Edition
Posted by Alex Goldschmidt
GAWKER/EDELMAN SMACKDOWN
First of all, we’d like to thank the fairy godmother who inspired Gawker’s bloggers to give birth to this headline.
Edelman Is A Soulless, Wal-Mart Shilling Firm That Shouldn’t Lecture About Ethics [Gawker]
You and your agency aren’t really the paragons of honesty and decency in communications that you present yourselves to be. You guys have run a political-style, multimillion-dollar campaign for years on behalf of Wal-Mart, one of the most objectionable companies in the world.
Paid liars. [The Writing on the Wal]
Reporters may understand that they’re going to be lied to on a regular basis, but do the people that shop there? If they do, why does Wal-Mart waste millions of dollars each year on Edelman? After all, they could always lie to the public just as easily and just as often for free.
Blog Wars: Gawker vs. Edelman [Adages]
It all started after Mr. Edelman personally responded to a post Mr. Nolan wrote that featured a marketing executive’s detailed account about a media training session he or she had with an Edelman employee wherein the Edelman employee flat out told the exec that: “Sometimes, you just have to stand up there and lie.”
Mr. Edelman demanded that the post be taken down immediately. Ummm ... fat chance of that happening.
The fact that Edelmen just launched a “transparency in communications” initiative: sadly ironic or poetic justice?
After the jump, Wal-Mart fights to stay afloat in Japan, and the company gets a very special valentine from citizens in California.
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Wal-Mart’s Green Campaign Hides the Company’s Unclean Hands
Posted by Alex Goldschmidt
Phil Mattera of Good Jobs First writes about the new wave of greenwashing currently sweeping corporate America. He compares recent green marketing campaigns to the dot-com boom of the late 1990s, or the housing market of the early 2000’s: all good things must come to an end.
In the third section of the article (excerpted below), Mattera explains that Wal-Mart is guilty of two cardinal greenwashing sins: enormous size and “unclean hands.” The problem of size is fairly straightforward: Wal-Mart is one of the largest companies in the world and it incorporates all the problems that stem from large scale production. “Unclean hands” is Mattera’s reference to Wal-Mart’s persistent and widespread labor problems. Not only do the company’s environmental efforts obscure these practices, they do so much as to actually distract from them.
Is Corporate Greenwashing Headed for a Fall? [Alternet]
Unclean Hands and Excessive Size
Corporations, no doubt, will not give up their environmental claims without a fight. Perhaps the hardest nut to crack will be Wal-Mart. For the past couple of years, the giant retailer has depicted itself as being on a crusade to address global warming and other environmental issues—a crusade it wants its suppliers, its workers and its customers to join. In October 2005 CEO Lee Scott gave a speech in which he embraced sweeping goals to reduce greenhouse gas emissions and raise energy efficiency. Last month he gave another speech that reaffirmed those goals and upped the ante by envisioning a future in which Wal-Mart customers would drive to the store in electric cars that could be recharged in the parking lot using power generated by wind turbines and solar panels.
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Wal-Mart turns a holiday deal into an irrelevant piece of technology
Posted by Research Team
One of the big deals that Wal-Mart had last holiday season was a HD-DVD player for $98.97. Considering previously high definition disc products were around $300, it was a steal. In the end, however, Wal-Mart shoppers should should feel robbed.
Three months after the holiday season, HD-DVD is going the way of Beta-Max. Wal-Mart decided to stop selling the format, and all those people who bought HD players are losing out. In a tough economy, losing $100 is certainly not a way to save money or live better.
From the New York Times Bits Section:
Never mind, John Lewis, the super-duper delegate of the DVD world has changed its vote. Wal-Mart is now going to back Sony’s Blu-ray format. Susan Chronister, a Wal-Mart DVD buyer wrote on the company’s Checkout blog that “Wal-Mart is going Blu.”
Wal-Mart, which sells something like 20 percent of the DVDs in this country, had been very aggresive in pushing HD DVD, largely because the lower price of its players. By June, only Blu-ray players and discs will be in Wal-Mart stores.
Ms. Chronister writes that she had decided to vote for HD DVD, buying a player for her family last Christmas. But her advice to others in her position: Buy early and often.
So… if you bought the HD player like me, I’d retire it to the bedroom, kid’s playroom, or give it to your parents to play their John Wayne standard def movies, and make space for a BD player for your awesome Hi Def experience.
Gawker Calls for Edelman to Drop Wal-Mart Account
Posted by Alex Goldschmidt
In response to yesterday’s post on Gawker that quoted Wal-Mart’s PR company Edelman encouraging clients to lie their way through messy PR situations, Edelman CEO Richard Edelman wrote a personal note to the Gawker bloggers:
Edelman CEO Responds To Gawker
From Richard Edelman, CEO of the massive PR agency Edelman, in response to yesterday’s tip about Edelman encouraging lying to reporters during media training: “Your post on Edelman today about an unnamed ad and marketing person alleging that we instruct our clients to lie as part of our media training is completely false and needs to be taken down. you bet we take ethics seriously. We advise our clients to be transparent, to tell the truth always but especially in crisis. That is only way to be in business for 55 years as a reputable pr firm. So if you want to discuss then call me at [Redacted]. I hope to hear from you. I don’t go for cheap shots from undisclosed sources.”
Gawker didn’t take the accusations lying down. The author of the original post explained that the quote had come from a credible source, and added that the concept of “ethical public relations” was a bit of a contradiction. The blogger went on to call for Edelman to drop Wal-Mart as a client, saying that Edelman couldn’t call itself an ethical company and have Wal-Mart as a client at the same time. The exchange is already making the rounds on the blogosphere.
Edelman Is A Soulless, Wal-Mart Shilling Firm That Shouldn’t Lecture About Ethics
Richard— We appreciate your own personal commitment to talking about ethics in PR. I would even go so far as to say that you believe what you say, and say it in good faith, most of the time. But we’re not gonna be taking down the post about your (alleged!) media training lying incident. And here’s why:
We really have no reason to, first of all. We got a tip from an actual marketing executive, and we put it up. I would make an educated guess that it’s true, but people can judge for themselves, as they have access to all the information about where it came from and what it said. That’s Gawker for you. Always servicey. (Even though we know you and your people have had plenty of issues with sites like Valleywag and Consumerist, as well).