ANALYSIS: Client Profile - Wal-Mart's family pulls together todeflect criticism

The first weekend of this holiday shopping season saw Wal-Mart

receipts total $1.25 billion. But the world's biggest retailer

wasn't always forthcoming with such information. Sherri Deatherage Green


Traditionally, communications at Wal-Mart have been kept in the family.

But outsiders are always going to get curious when that family is the

world's largest retail chain, and ranks number two on the Fortune 500,

with over a million "associates" (employees) in over 3,000 stores


"We are a very high-profile company, whether we want to be or not, and

becoming more so all the time," admits corporate affairs VP Jay


"If you don't define yourself, someone else will, and chances are you

won't like it."

Although sharing information with employees remains a bedrock

principle, management historically saw little value in applying it to

the outside world. Great strides have been made in recent years to

"protect the brand," as Allen says, by communicating the good Wal-Mart

does. But the company still isn't prone to tooting its own horn.

Company founder Sam Walton worked for JC Penney, and later owned Ben

Franklin five-and-dime franchises. Those companies, along with rival

Kmart, may today rue Walton's intermingling of their ideas with his own,

as they struggle to compete against the 39-year-old discount giant.

Walton particularly embraced JC Penney's customer-focused philosophy,

and preference for the word "associates" over "employees." He emphasized

empowerment through information. Today, management communicates

twice-daily broadcasts to all stores, and sends monthly newsletters via


Information sharing goes both ways, especially as the chain tries to

overcome market saturation by customizing product selections to local


Wal-Mart continues to share much financial information with its

expanding international workforce. Walton himself clearly viewed the

practice as vital, but also as a calculated risk. "I just believe the

value of sharing it with our associates is much greater than any

downside there may be to sharing it with folks on the outside," he wrote

in his 1992 autobiography Made in America: My Story.

Walton's personal disdain for the press jumps out on the book's first

pages. He describes "these scavengers" who came to Bentonville, AR after

Forbes named him America's richest man in 1985. "I wasn't about to

cooperate with them," he wrote.

Moving beyond Walton

Most Wal-Mart traditions survived Walton's death in 1992, but the

realities of the global marketplace have loosened the company's tight

lips. Talk at board meetings now often turns to image, Allen


Information isn't released lightly, however. PR is viewed as a means to

support stores and sales. "PR should be a tool in executing a strategy,

not a strategy in and of itself," Allen says.

Perhaps illustrative of this philosophy was the May decision to stop

selling sales data to companies like AC Nielsen (which plots purchasing

trends), because competitors benefited more than Wal-Mart did. Vendors

now can access Wal-Mart's point-of-sale data only from its proprietary

RetailLink system.

Corporate philanthropy is one subject Wal-Mart does like to talk


The emphasis on publicizing good deeds is in some ways related to one of

Wal-Mart's perennial communications challenges: the big-box issue.

The size of the company and its individual stores makes it a target for

critics. Not everybody wants to live near a humongous building that

draws heavy traffic. Some detractors go further, blaming Wal-Mart for

the demise of downtown, on-the-square merchants. Communicating

real-estate issues is a major focus of the company's six-person state

and local government affairs unit.

Corporate affairs director Betsy Reithemeyer stands prepared with facts

to counter big-box opponents. When Wal-Mart comes to town, local

economies do change, she admits. The local shoe store might have to move

or revamp its stock. But Wal-Mart creates jobs and draws shoppers from

other communities, Reithemeyer contends.

Yet the company recognizes the need to publicize what it gives back to

communities. Philanthropy efforts are local, with employees selecting

charities and designing their own fundraising activities.

In the wake of September 11, Wal-Mart gave more than supplies. It

publicized the $12 million-plus that the company and its

employees donated, the merchandise shipped to rescue workers from a New

York store that hadn't yet opened, and the warehouse space it provided

the Salvation Army. It also became more charitable with information.

The chain normally wouldn't release sales data to The Wall Street

Journal, and wouldn't often make CEO Lee Scott available for live

interviews on the Today show. It did after the tragedy, however, to

reassure Americans that life was getting back to normal, Allen says. The

data illustrated that while sales of guns, gas cans, bottled water, and

TV antennas spiked immediately after the attacks, shopping pretty much

returned to normal patterns by the weekend. Demand for flags remained

high, of course.

Media relations

Journalists who cover Wal-Mart regularly say the communications staff is

responsive once they get to know you. Arkansas Democrat-Gazette reporter

Dan Zehr says media relations staffers return his calls promptly, even

if they can't always answer his questions. "Wal-Mart historically has

had the reputation of being guarded about its information," he says.

"That doesn't seem to have changed a whole lot."

One national reporter, however, isn't sure the company's stand-offish

reputation is accurate. "I think if you deal with them straight, they

deal with you straight," she says. The PR team responds even when

stories aren't flattering, she adds.

In addition to the ever-present big-box issue, Wal-Mart has weathered

negative stories in recent years regarding labor problems (namely its

foreign sweatshops and low employee representation in American labor

unions). Allen's biggest labor challenge has been in-house, though -

attracting heavyweight PR talent to a small town in the Arkansas


Wal-Mart's in-house PR staff has grown to about 40 people since Allen

came from Fleishman-Hillard six years ago, but not without considerable

effort. The population of northwestern Arkansas stands at about 250,000,

thanks in no small part to Wal-Mart's economic impact. Still, attracting

two-career families is difficult unless the spouse not employed by

Wal-Mart goes to work for one of the many vendors who set up shop near

their biggest customer. Thus, Wal-Mart depends on Fleishman to help plan

and carry out its communication strategies, APCO for assistance on legal

issues, and New York's Graubard Group and Little Rock's Mitchell

Marketing for grand openings.

PR pros who put high value on posh office space need not apply at

Wal-Mart, either. Corporate head-quarters occupy a converted

warehouse, while the company cafeteria serves chicken nuggets and mashed


But working in plush surroundings is not the attraction here. Former AP

reporter Bill Wertz recently joined Wal-Mart's PR team from Phillips

Petroleum in Bartlesville, OK. "I really think Wal-Mart is the most

interesting company in the world today," he says, munching a cold

sandwich. "I don't know that any company touches people's lives in as

many ways as Wal-Mart does."


SVP of corporate affairs: Jay Allen (reports to EVP of administration

Michael Duke)

Other key communications staff: Director of corporate affairs Betsy

Reithemeyer (philanthropy); director of state and local government

affairs Bob McAdam (includes real-estate issues); VP of national

government affairs Norm Lezy (Washington); international corporate

affairs manager Maria Rodriguez; PR VP position vacant; IR handled by

CFO Thomas Schoewe

Communications staff: About 40 employees

Agencies: Fleishman-Hillard, agency of record. Also project work by APCO

in Washington, DC, Graubard Group in New York, and Mitchell Marketing in

Little Rock, AR

PR Budget: Less than $10 million annually.

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