October 28, 2005
Friday

Still basking in the praise it received for its relief efforts after Hurricane Katrina, Wal-Mart now wants to polish its image on issues it has long been criticized for, including health care, wages and the environment.

Last month, Wal-Mart responded to Katrina with an unrivaled $20 million in cash donations, along with truckloads of free merchandise, food and the promise of a job for each of its displaced workers.

At a meeting with workers and executives this week, Wal-Mart Chief Executive Officer Lee Scott urged his audience to look even deeper.

"What if the very things that many people criticize us for - our size and reach - became a trusted friend and ally to all, just as it did in Katrina?" he said.

With that, Scott introduced a slew of initiatives that the company expects to take up in the coming years. Among them are a plan to reduce greenhouse gases at stores around the world by 20 percent in the next seven years; health care coverage to be made available to workers for about $25 per month; and a call for Congress to raise the nation's minimum wage from $5.15 per hour.

"We have an aggressive vision," Scott concluded. "With courage and commitment to change, we will be at our best and remain true to the legacy of the company Sam Walton founded some 43 years ago."

The timing of Wal-Mart's initiatives coincides with positive press coverage and glowing feedback it received after Katrina. But it also follows years of criticism that has come to a head in the form of lawsuits. Wal-Mart is embroiled in the nation's largest-ever gender discrimination suit as well as a number of wage-and-hour-law cases and environmental disputes.

Scott's speech did little to quiet Wal-Mart's longtime critics, who chalked the initiatives up to little more than an attempt by the retailer to burnish its image.

"It's hard for me to imagine any CEO saying more and promising less," said Chris Kofinis, spokesman for Wake Up Wal-Mart, which is backed by the United Food and Commercial Workers union.

Kofinis said that Wal-Mart has not changed its health insurance eligibility requirements, which he said is why less than half of the company's workforce has coverage. He also criticized Scott for failing to raise Wal-Mart's own wages for full-time workers, which are about 20 percent less per hour than the average retail-industry wage.

"It's a publicity stunt full of empty rhetoric that promises nothing to workers," Kofinis said of Scott's speech. "It fails to address the core failures of this company."

Sarah Wallace, vice president of brand strategy at the Addis Group in Berkeley, said that in the past, Wal-Mart has managed to skate past all the criticism because its core customers remained loyal because of the company's low prices.

"At first perhaps there was a sense that the anti-Wal-Mart sentiment was just confined to the coast and major metros," Wallace said. "But now the negative image has been seeping into the mass consumer psyche as well. That may be one reason why they're sitting up and taking notice now."

Andy Ruben, Wal-Mart's vice president of corporate strategy, said the company's recent call for action has nothing to do with the criticisms it is facing. Rather, it stems from discussions that company executives have had with people in communities where Wal-Mart stores operate.

"The things we've been talking about have been going on for months," Ruben said.

In his speech, Scott said that the issues people have raised about Wal-Mart include jobs, health care, community involvement, product sources, diversity and environmental impact, "all the issues that we've been dealing with historically from a defensive posture."

"What became clear is that in order to build a 21st century company, we need to view these same issues in a different light," Scott said.

Lisa Smithline, executive director of Brave New Foundation, which has been involved in a soon-to-be released film titled "Wal-Mart: The High Cost of Low Price," said the company's critics have caused enough of a stir that they can no longer be ignored.

"Obviously, I have no idea what is exactly in their minds, but based on the worldwide pressure that they've been under, their response is not surprising," she said.

Smithline added that she would be thrilled to see any improvements come out of Wal-Mart's new initiatives, but she remain cautious in her enthusiasm.

"They obviously know what the right thing is to do," she said.

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