Pat McCaughtry has felt the temptation to buy tires at Sam's Club for a much cheaper price than at her local tire shop, but she consistently has resisted the urge. That's particularly the case these days, now that she has signed up to host a mid-November screening of a new documentary critical of the warehouse club's owner, Wal-Mart.
Pat McCaughtry has felt the temptation to buy tires at Sam's Club for a much cheaper price than at her local tire shop, but she consistently has resisted the urge. That's particularly the case these days, now that she has signed up to host a mid-November screening of a new documentary critical of the warehouse club's owner, Wal-Mart.
"I guess I'm committed now," said the Wilkinsburg resident and union member who never really enjoyed shopping at the Bentonville, Ark., retailer's stores, anyway. There were too many lines, and her purchases didn't always hold up.
Ms. McCaughtry's screening of Robert Greenwald's "Wal-Mart: The High Cost of Low Prices," will be one of hundreds, perhaps thousands, held this month in a grass-roots-style campaign to sell the documentary movie and spread its message that shopping Wal-Mart is bad for the country. The juggernaut of publicity, coming just as the key holiday shopping season is getting under way, is meant to hit the retailer where it hurts.
It is an attack for which the company has been preparing for months, shipping out press packets picking apart charges in the anti-Wal-Mart documentary and offering information on a pro-Wal-Mart documentary coming out this month, too. Wal-Mart Chief Executive Officer H. Lee Scott, Jr., has been enlisted in the fight and seemed to be everywhere last week, talking with employees, analysts and the media about health-care insurance and environmentally sensitive packaging, not to mention issuing an unusual call for an increase in the minimum wage.
No matter who wins, the showdown has all the earmarks of a classic, pitting committed labor and environmental groups against a retail giant equally committed to selling more and more people on the Wal-Mart way. "They do make very interesting public relations case studies," said Rob Merritt, executive vice president of public relations for Station Square ad agency Marc USA.
The face-off has taken on added urgency this year for Wal-Mart, which was hurt early in the critical holiday season in 2004 when, instead of creating a lot of excitement with tantalizing discounts, it tried to go for higher profit margins. It never fully recovered its momentum and vows not to be caught off guard again this holiday season.
Already, Mr. Scott has said the merchant, which generated $285 billion in sales last year, will be aggressive in pricing, something evident in toy prices that have been slashed 30 percent even before the season has started, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting firm in New York. The stores also are finding ways to offer flat screen TVs at an everyday low price, hot-selling items that it failed to capitalize on last year.
"They have gone back to what works for them," said Mr. Davidowitz, who began to feel better about Wal-Mart's strategy a month or so ago when he saw the retail giant making aggressive moves to beat out competitors with sharp pricing while also trying to go a bit upscale. For example, tired of watching much smaller Target get plaudits for its cheap chic, plus post better sales increases in existing stores, Wal-Mart has upgraded its home goods lines and unveiled a more fashionable line of women's clothes called "7."
Wal-Mart also is taking no chances of a late holiday start. Its advertising campaign starts as soon as the last witches and wizards head home from Halloween.
While those steps might have been expected from any merchant whose stock price and same-store sales have lagged, the grocery list of work force management and environmental changes that Mr. Scott detailed last week would not.
A constant drumbeat of criticism against company practices may be hurting employee morale. "Now that is life or death for Wal-Mart," said Mr. Davidowitz. "Those people have to come to work and feel good about Wal-Mart."
The retailer may still provide one of the few opportunities to get a job without a college education or a top-notch resume and work up to a job as a well-paid store manager, said Mr. Davidowitz. Achieving that level of success requires "working like a dog," he said.
Employees may find it hard to feel good about a company accused of offering such skimpy health-care coverage that families do better on government programs, paying people so little they can't afford the health care offered, not to mention damaging communities with out-sized, non-environmentally sensitive buildings.
Mr. Scott seemed to be trying to knock down all the criticism of the corporate giant in one fell swoop, with opponents moving quickly to set them right back up.
He said the company will make health insurance more affordable with a new plan that will launch Jan. 1, as well as making health care more convenient by adding in-store clinics. The union-funded advocacy group Wal-Mart Watch almost immediately released a private Wal-Mart memo in which an executive laid out ways to reduce health expenses by trying to hire more physically fit workers.
Mr. Scott said he had come to see such environmental issues as Hurricane Katrina in slow motion, and vowed to increase use of renewable energy, reduce waste and carry environmentally sensitive products. Wal-Mart will soon be selling baby clothes made using organically grown cotton and has plans to improve its truck fleet efficiency by 25 percent in the next three years.
Those groups fighting Wal-Mart stores in Kilbuck and Penn Hills may be interested to learn the company also promised to adopt a store siting and construction policy in the next 12 months that it pledges will address environmental, social and historical considerations.
Self-interest plays into Wal-Mart's strategy. Even avowed fan Mr. Davidowitz does not believe the company has suddenly become a member of Greenpeace. "I think they're searching for ways to deal with the exploding costs" of energy, fuel and packaging, he said.
Wal-Mart's call to raise the minimum wage surely surprised many in the retail industry who have been battling that move for a long time. Last month, the National Retail Federation sent a letter to U.S. Senate Majority Leader Bill Frist strongly opposing a minimum wage hike amendment under consideration.
The argument espoused by the biggest retailer of them all had as much to do with its customers as its employees. The company has seen the increase in spending on the first and fifteenth of every month and then a dip at the end of the month when low-income workers are waiting for the next paycheck.
Both sides in this public relations dog fight realize they must win over certain key audiences. The unions that long tried to change Wal-Mart didn't get anywhere until they stopped trying to organize the work force and focused on changing public opinion.
Wal-Mart has repeatedly said it will not talk with critics who just want it to fail. Instead, its focus is on Wall Street, where analysts have noticed chinks in the retailer's armor, and to middle American consumers who have been the force behind the company's march to prominence but also may be getting confused by all the negative things they are hearing. "They're basically going to address the audiences they feel they have to address," said Mr. Merritt, at Marc USA.
Wal-Mart's strategy continues to play out this week with a gathering scheduled in Washington, D.C., to discuss independent research on the company's economic impact on society. Its opponents' game plan includes a "Halloween" fund-raising drive to help uninsured Wal-Mart workers and calls for consumers not to buy holiday gifts at the retailer's stores.
Just how big an impact the anti- and pro-Wal-Mart documentaries will have on either side is unclear, since those who choose to view the films will likely already have an opinion. Reports say groups and individuals already have scheduled more than 3,000 screenings of the Mr. Greenwald's film, and the makers of "Why Wal-Mart Works & Why That Makes Some People Crazy" are trying to pick up a little of the action by challenging Mr. Greenwald to show the films together.
At last check, six screenings of Mr. Greenwald's film were listed for Western Pennsylvania, including one to be held at the United Steelworkers building, Downtown, and another at the First Unitarian Church on Morewood Avenue in Shadyside.
Ms. McCaughtry is counting on about six people to come to her showing. At that size, it can be held at a friend's place. If more RSVP, she'll move it to Hope Lutheran Church in Forest Hills, where she is a member.
While she expects to draw mostly people who already have concerns about Wal-Mart, anyone is welcome to come eat the soup and chew the fat.
What would it take to convince her that Wal-Mart has become the kind of retailer she could patronize?
Ms. McCaughtry might reconsider if the company met certain employment standards such as paying workers a minimum wage of $10 an hour and making sure all employees can work full-time if they want to, receive health care and get some company contribution toward some sort of retirement plan.
"If Wal-Mart did that, I would have a bit more respect," she said. She might even feel free to check out that Sam's Club deal on tires.
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Source: Knight Ridder/Tribune Business News
