HOLMES REPORT: Inglewood, CA, Wal-Mart decision shows firm must consider its image's effect on growth

It would be easy to overstate the importance of the recent vote in Inglewood, CA, where a majority of residents chose to block Wal-Mart's proposal to build a 60-acre shopping center.

It would be easy to overstate the importance of the recent vote in Inglewood, CA, where a majority of residents chose to block Wal-Mart's proposal to build a 60-acre shopping center.

Yes, the company spent a reported $1 million on a ballot initiative and PR campaign to persuade voters that they should overrule elected officials, who had already rejected the company's plan. Yes, the vote was 60% to 40% against the retail giant. And yes, the Los Angeles City Council is considering an ordinance that would make it almost impossible to build such giant retail outlets within the city limits. And yes, critics of Wal-Mart - a diverse group that includes small-business owners, organized labor, environmental groups, and community activists - are already hailing a great victory. But my guess is that most folks in Bentonville, AR, where Wal-Mart has headquarters, view the Inglewood decision with irritation but not alarm. After all, the company is the world's largest retailer, with $245 billion in sales last year, and the world's largest private employer, with 1.3 million associates. And most communities continue to welcome the retailer. They appreciate the low prices and they understand that Wal-Mart makes a genuine effort to give back to the communities in which it operates. So the Inglewood decision is no cause for panic, but it should persuade Wal-Mart's management to pause and reflect on the way the company does business because it suggests that the company's reputation - tarnished by recent news coverage, particularly of its labor practices - is beginning to interfere with its expansion plans. Wal-Mart management might take some comfort from the fact that its company was recently named America's most admired by Fortune magazine. But that designation reveals only the hollowness of a reputation-ranking system that asks financial stakeholders to evaluate companies on financial criteria. Wal-Mart might be a darling on Wall Street, but it is increasingly regarded with suspicion on Main Street. There is a widespread feeling that Wal-Mart's low prices come with a hidden cost: the loss of jobs that pay a living wage and - in the case of workers reportedly locked in stores after clocking out or overnight - human dignity. The company can produce studies demonstrating its positive economic impact on the communities where it operates and feature happy employees in its ads, but the vote in Inglewood and the accompanying concerns over the money it spent there reflect suspicion that Wal-Mart would rather talk over and not with its critics. Wal-Mart's economic and social power make its expansion a source of legitimate public concern. It must realize that fact and engage in constructive dialogue about the implications of its growth.
  • Paul Holmes has spent the past 17 years writing about the PR business for publications including PRWeek, Inside PR, and Reputation Management. He is currently president of The Holmes Group and editor of www.holmesreport.com.

  • Have you registered with us yet?

    Register now to enjoy more articles and free email bulletins

    Register
    Already registered?
    Sign in

    Would you like to post a comment?

    Please Sign in or register.