Fayetteville, AR. Wal-Mart Annual Meeting: Milky Way or Chardonnay?
In case you weren't one of the 15,000 people who swarmed at the Bud Walton Arena in Fayetteville, Arkansas yesterday for the Wal-Mart Annual Makeover meeting, here is Sprawl-Busters' highlights of the event:
1. It lasted far longer than the Home Depot Annual meeting, had more dancing characters, and actually had some board members show up.
2. It ended with "American Idol" winner Taylor Hicks singing two songs, proving that amateurs attract amateurs.
3.Everything else in-between was about how Wal-Mart is in the middle of an identify crisis.
Every June, Wal-Mart tries to show stockholders that it is a dynamic, vital company, which means it is constantly undergoing an identity makeover. This month's theme, according to CEO Lee Scott, is "Wal-Mart Out In Front." In front of what, analysts might ask? Certainly not in front of its chief rival Target, for same store sales growth. Certainly not in front of Home Depot for net profitability. And definitely not in front in any public popularity contest, as more and more Wal-Mart stores collide with the citizen opposition movement across the nation. Wal-Mart's Makeover this year was highlighted by its effort to appear more upscale. The retailer wants to broaden its base outwards from the low-cost shopper, to the discretionary spender, the higher-income consumer. Everytime Wal-Mart locates a store they look at the household income within a seven mile radius, and they are hunting now for shoppers with more money to spend. Their Friday morning extravaganza began with what one newspaper called "Disney-style performances featuring Wal-Mart characters in green, red and blue vests who danced and sang about the customer." They danced around the stage pushing shopping carts to dance tunes. In their mindless lyrics were the key aspirations of Wal-Mart management: "They stopped to buy a Milky Way," one character sang, "and discovered we had Chardonnay." The figures moved around a stage filled with upper-end props of i-Pods and plasma screens. Finally, the company lined up some key executives for a "scripted panel discussion." The Executive Vice President of Wal-Mart's People Division, who had a damaging memo released several months ago about Wal-Mart's health care problems, boasted of the company's new low-cost health care for workers and their children. "Health care's important, isn't it?" she said. "That's a key part of our jobs (that employees have) good wages and good benefits. It's important to all of us." She said Wal-Mart health-care plans are now offered to every employee for $23 per month, plus 50 cents a day for kids. That's health care for 76 cents a day -- something only Wal-Mart could hype. A low cost, low value product. The executive vice president of Global Procurement, discussed Wal-Mart's ethical standards it is pursuing with its suppliers, especially in the Asian market. "We can raise ethical standards in many factories that produce products for us. We also impact hundreds of thousands -- if not millions -- of others who work in factories across the world," he said. Yet no one will ever know it, because Wal-Mart still has not published its list of factories, or allowed an independent auditing of working conditions there. And Wal-Mart wants to change Red China into "Green China" by experimenting with environmentally conscious building practices. But the "green" Wal-Mart sees in China is like the green they see in Mexico or Canada. International sales are now 20% of all Wal-Mart revenues. Finally, the company says it will add roughly 600 stores this year, about a third of which will be international. Wal-Mart says it has more than 6,500 stores in 15 countries and serves 176 million customers a week. The company intended to keep expanding its retail footprint by 8% annually. Hardly an environmentally-friendly projection, given the cannibalization that the over-saturation of big box stores has already created, on top of Wal-Mart Realty's 24 million square feet of empty stores for sale or rent. What's next: stores on the Milky Way?
What you can do: With symbolic timing, the federal Equal Employment Opportunity Commission (EEOC) , announced the day before Wal-Mart's Annual Makeover, that the retailer had agreed to pay $315,000 to settle two sexual harassment lawsuits, which charged that company employees had subjected three female workers to sexual harassment at a store in Bradenton, Fla. How many bottles of Chardonnay will that buy? The EEOC action left Wal-Mart "Out In Front" of one more day's bad headlines.