business news in context, analysis with attitude

  • Speaking at Goldman Sachs' annual Global Retailing Conference in New York, Wal-Mart CEO Lee Scott said that the company needed to redouble its efforts to repair its tarnished reputation, needed to take seriously and address legitimate questions about employee infractions, and would continue to battle against lawsuits that it feels are unjustified.

    "We have got to eliminate this constant barrage of negatives that cause people ... to wonder if Wal-Mart will be allowed to grow," Scott said, according to reports from the conference. "Our message has not gotten out to the extent that it should. I think that's management's failure. We thought we could sit in Bentonville, take care of customers, take care of associates, and the world would leave us alone.”

    By addressing the company’s burgeoning public relations nightmare, Scott said, management could eliminate questions about whether it can continue to grow at a sufficient pace.,

    Scott also said that the current unstable economic situation, high gasoline prices, and a negative political tone in the country all contributed to an environment that makes it difficult for people to want to spend money. But, Scott predicted, things will turn around. “Christmas will come,” he joked.

  • The Los Angeles suburb of Rosemead, 12 miles east of downtown LA, has approved a proposal that would allow Wal-Mart to build a 150,000 square foot store there.

    However, the threat remains that labor leaders and some citizens groups will oppose the project in court and even try to recall the City Council that approved the measure.

    The city of Los Angeles has enacted legislation requiring that big box retailers to pay for an economic impact analysis of the neighborhoods where they wish to build, but Rosemead falls outside the jurisdiction of this legislation. The California legislature has passed a similar rule, but it has not yet become law.

KC's View:
What Wal-Mart sometimes doesn’t seem to realize is that it isn’t just a public relations problem. Not that the company is wrong all of the time or even most of the time…but that’s almost besides the point.

When any company gets to be as big as Wal-Mart, with the kind of economic/cultural impact that it exercises on a regular basis, then there are issues of public policy that need to be considered. We’re not anti-capitalism, but we think that too much power of any kind concentrated in any one place presents challenges and problems that ought to be considered and explored.

It’s not just a question of clarifying the message. Sometimes, it is just being willing to accept that the opposition may have a point, and certainly has a right to be heard.

We’re not sure what the answers are, nor even exactly how to phrase the questions. But we’ve always believed in the statement by British historian Lord Acton that “power tends to corrupt; absolute power corrupts absolutely.”