Wal-Mart Coming 'Out in Front'

Top Executive Announces New Campaign

Last updated Friday, June 2, 2006 8:03 PM CDT in News

By Anita French
The Morning News

"Who would have predicted that the company with the most humble beginnings would have prospered the most? I have a feeling Mr. Sam knew," Scott said.

The two reasons for Wal-Mart's success boil down to its being committed to change and serving working families, he said.

"Change is woven into the very fabric of Wal-Mart stores, (and) I like to say that working families is who we are, who we serve and what makes Wal-Mart a success," Scott said.

To intermittent applause and cheers from the audience packing Bud Walton Arena, Scott cited some new facts about Wal-Mart: the company now has 1.8 million employees and serves 176 million customers a week worldwide, "enough to fill this auditorium 9,000 times," Scott said.

The company also is looking at new markets, such as "booming" India, he said.

"We look forward to the Indian government opening up more (opportunities for foreign investment). Wal-Mart's marketplace is the world," Scott said.

He also said Wal-Mart will lease space for 50 additional health clinics in its domestic stores -- a new service the company began offering earlier this year. Scott said he has been told 30 percent to 40 percent of those visiting the clinics are uninsured and most of them would have gone to a hospital emergency room if the Wal-Mart clinic hadn't been available.

Wal-Mart's new environmental sustainability program, introduced last year, also is becoming an "integral and lasting part" of the company's culture, Scott said.

Patricia Edwards, fund manager with Wentworth, Hauser and Violich in Seattle, said Wal-Mart's new campaign seems to be a continuation of themes already introduced by the company.

"I think they are taking steps that need to be taken, such as a need to be more relevant to customers. The risk they run is alienating their core customer," she said.

Wal-Mart has said it is trying to draw in a more affluent consumer by offering new fashions, organics and upper-end merchandise. It's also spiffing up its stores, and Scott particularly cited the radically designed Supercenter that opened this year in Plano, Texas, carrying such items as sushi and expensive wine. Scott said the store was already performing above expectations.

Scott started his talk by reminiscing about past shareholder meetings, saying this one was his 27th meeting. The first shareholders meeting he attended was in a small auditorium in Bentonville -- he recalled "like it was yesterday."

It almost sounded like the beginning of a farewell speech, which some analysts and others had speculated about after Scott took an unprecedented monthlong vacation in May. Edwards was one of those analysts who had said earlier that Scott's long vacation might mean a shake-up in management was about to take place.

"(Wal-Mart) is making a lot of changes, and I think (Scott) has been given the time to see if these changes work the way they are supposed to," she said Friday after the shareholders meeting.

Wal-Mart officials have denied Scott is leaving the company. A Wal-Mart spokesman did not return a phone call Friday seeking comment.

Scott also joked twice about "leaked memos" during his talk, referring to several internal company memos leaked to one of Wal-Mart's biggest critics, Wal-Mart Watch of Washington.

One of the memos had to do with Wal-Mart's health care plans, and Wal-Mart Watch spokesman Nu Wexler, who attended Friday's event, said he wasn't amused by Scott's remarks.

"Both (remarks) were flip, and we wish he had addressed this issue in a more serious manner. An unaffordable and inaccessible health-care plan for the world's largest retailer is more than just a flip joke," Wexler said.

Susan Chambers, executive vice president of Wal-Mart's People Division and author of the controversial health-care memo, told those at the meeting Wal-Mart will create "tens of thousands" of jobs this year, many of them filled by students and retirees. She said the company provides "good wages and benefits," and employee opinion surveys have been favorable.

Chambers was joined on stage by fellow executives Lawrence Jackson, president/CEO of global procurement; vice chairmen Mike Duke and John Menzer; Doug Degn, who heads the company's Sam's Clubs; and Eduardo Castro-Wright, president/CEO of Wal-Mart's domestic stores.

All six executives held a conversation among themselves on stage about what a good company Wal-Mart is and how its main goal is to take care of customers and employees.

Martha Burke, head of the National Council of Women's Organizations, seemed to take exception to that last notion. She spoke in support of a shareholders proposal asking Wal-Mart to be more open about its stock option program.

"Is our company being fair to our female employees who are the majority of employees? Is it being fair to (those) who happen to be people of color?" Burke asked.

She addressed her comments to Wal-Mart Chairman Rob Walton, who later said all six shareholder proposals had been defeated.

Reader Comments (1 comment(s))

The following comments are provided by readers and are the sole responsibility of their authors. The Morning News does not review comments before their publication, nor do we guarantee their accuracy. By publishing a comment here you agree to abide by our comment policy. If you see a comment that violates our policy, please notify the web editor.