Wal-Mart Will Defend Reputation in ads

Posted 08 January 2007 @ 09:40 am EET     Print     Reprint     E-Mail     Comments

Wal-Mart Stores Inc. will run national television ads starting Monday praising its record as an employer and corporate citizen, taking its arguments straight to the public in an ongoing battle over its reputation with unions and other critics.

The world's largest retailer, increasingly a lightning rod for politicians as well as labor unions and other activists, cites the legacy of late founder Sam Walton in a folksy 60-second ad. A 30-second ad focuses on Wal-Mart's health insurance plans for its more than 1.3 million U.S. employees.

"It all began with a big dream in a small town, Sam Walton's dream," a narrator says as one ad starts with a black-and-white photo of Sam Walton and a grainy shot of Walton's first five-and-dime store in what is now the chain's headquarters town of Bentonville, Ark.

"Sam's dream. Your neighborhood Wal-Mart," the ad ends. Both ads recite key points Wal-Mart has been making to reporters for months about its record, but the ads now take the arguments straight to the public. The nation's largest private employer says it creates tens of thousands of jobs a year, offers employee health plans for as little as $23 a month, saves "the average working family" more than $2,300 a year through its low prices and is a major contributor to local charities with donations last year totaling more than $245 million.

In a news release about the ads, Wal-Mart said a survey of its employees nationwide last summer found 88 percent believe the company is a good corporate citizen and 81 percent would recommend a Wal-Mart job to a friend. Company spokesman David Tovar declined to say how much Wal-Mart is spending on the ads, which were tested last summer in Tucson, Ariz., and Omaha, Neb. They will run for an as-yet undetermined period on national broadcast and cable networks as well as in a "couple of dozen" individual markets, Tovar said.

Steven Silvers, a corporate reputation management expert with Denver-based consultancy GBSM Inc., said it was strategically smart of Wal-Mart to take its case directly to the public to counter mounting attacks. "If they're targeted, they have to get their message out there," Silvers said. "It's because they have become political fodder. They have to frame the discussion."

Wal-Mart was the focus of two high-profile but unsuccessful efforts last year to legislate how it treats employees. Maryland's Legislature passed a union-backed law that would have forced Wal-Mart to spend a fixed percentage of payroll on employee health insurance. That law was overturned by a federal court. Chicago's City Council passed an ordinance mandating higher wages at big-box retailers, but it was vetoed by Mayor Richard Daley.

Union-funded campaign groups have also recruited national Democratic figures to back their calls for higher wages and better health care at Wal-Mart, including potential 2008 presidential contender Sen. Barack Obama of Illinois and declared 2008 candidate John Edwards.

WakeUpWalMart.com, a union-funded campaign group, said the ad campaign proves Wal-Mart is seeing damage to its bottom line from a worsening reputation. The retailer had its worst holiday sales season in years, WakeUpWalMart.com spokesman Chris Kofinis said.

"Wal-Mart is living in a bizarre state of denial, where no matter how bad their public reputation is, they still believe that a tired ad campaign can fool the American public into believing it is OK to exploit millions of working families," Kofinis said.

WakeUpWalMart.com and another union-backed group, Wal-Mart Watch, claim Wal-Mart pays poverty wages, runs small businesses out of town and pushes employees onto tax-funded public health care. Wal-Mart denies those allegations.

The union groups have repeatedly run newspaper and television ads. Wal-Mart said its ads are part of a continuing effort to show it is good for its employees and customers.

"This campaign is part of a long-term effort to inform the public about the company's positive impact on communities, including some of our core values like affordable health care, customer savings and charitable contributions," Tovar said.