CHICAGO: Wal-Mart CEO Lee Scott announced a new initiative this week to pursue new-store construction in neglected urban areas, and to simultaneously curry favor with the small businesses that will soon have Wal-Mart as a neighbor and competitor.
In a speech last Tuesday to the Newspaper Association of America, Scott said the company plans to build 50 new stores in economically depressed neighborhoods. Ten of those will be designated as "Jobs and Opportunity Zones," where the company will implement a host of community relations measures targeting small businesses--a demographic that has historically been opposed to Wal-Mart and other "big box" retailers.
Wal-Mart spokesman Dan Fogleman said the initiative will "help these small businesses learn how to thrive with Wal-Mart in the neighborhood." He said small businesses can take advantage of the foot traffic generated by a Wal-Mart, and beat the retailer in areas like customer service to draw shoppers.
The company plans to feature local small businesses in print and radio ads, donate $500,000 to local chambers of commerce, and even hold seminars to teach them how to compete with Wal-Mart.
Edelman vice chairman Leslie Dach said the agency was "supporting" the initiative as part of its ongoing work.
Opposition group Wake Up Wal-Mart called the plan "Wal-Mart's Latest PR Stunt."
"Wal-Mart has professional opponents," Dach said. "The public understands that they're professional critics."
He contended that the construction of Wal-Marts in poor neighborhoods would help spark economic revitalizations.
"There are a lot of small businesses that benefit [from Wal-Mart]," said Dach. "There are some that don't, but there are a lot that do."
But a 2005 study by researchers from the Public Policy Institute of California found that "In the retail sector, the representative Wal-Mart presence... reduces employment by two to four percent," and that "residents of a local labor market do indeed earn less following the opening of a Wal-Mart."
The company has been working with Edelman since last fall. The current initiative is the latest in a series of steps by Wal-Mart to bolster its corporate image. Late last year, it launched a group called "Working Families for Wal-Mart" to tout the testimony of supporters of the company.