Published on: December 4, 2006
Wal-Mart continues to make a number of headlines as it struggles to get its footing in the face of uninspiring sales increases and questions about its strategies and tactics.
For Wal-Mart, it is always complicated and never dull.
The Washington Post
writes, for example, that when Wal-Mart wanted to expand its customer base and grow its sales, “It designed a line of up-to the-minute clothes. It stocked its shelves with organic cotton sheets and sustainable fish. It wished its customers a ‘Happy Holiday,’ not a "Merry Christmas.’ It hired civil rights leader Andrew Young to burnish its image. It joined the National Gay and Lesbian Chamber of Commerce. This year, it began remodeling nearly half its stores.”
But not so fast…
“Many of Wal-Mart's core customers disliked the new clothes and skinny jeans, which also failed to set off a serious buzz among the fashion conscious,” the Post
writes. “’Merry Christmas’ is back, after the American Family Association and the Catholic League launched a boycott. In May, Wal-Mart pulled out of South Korea, and followed that with a retreat from Germany in July. In August, Young quit after making inflammatory remarks about ethnic grocers in African American communities. In September, Wal-Mart said it was getting rid of layaway, which analysts said sent the wrong message to the 20 percent of its customers who do not have a bank account.”
In other words, one step forward, two steps back.
Consistency seems to be one issue.
In Minnesota, the Pioneer Press
writes that Target Stores seems to be outperforming Wal-Mart in part because “Target's strategy as a discounter of cheap chic playing more to slightly wealthier consumers, whose discretionary spending has been less vulnerable to rising gasoline prices and other economic undulations than that of Wal-Mart's core shoppers, who have lower incomes.”
However, there also seems to be a growing sense – at least on the part of some analysts – that Target has succeeded by being more consistent in its approach and not undertaking the shifts in strategy that Wal-Mart lately has been attempting.
Meanwhile, Wal-Mart also has political issues to deal with.
Traditionally a Republican-leaning company, the retailer has been ramping up its donations and connections to the Democratic Party, a wise move since Democrats won back control of the US Congress in the November elections.Bloomberg
reports that Wal-Mart’s main goals are to “persuade lawmakers that criticism of its labor practices is unwarranted and that free trade helps consumers.” While it has had some success getting support from some lawmakers, Bloomberg
reports that “Wal-Mart's efforts to reach out to more Democrats may not be enough to soften the anti-Wal-Mart stance of critics such as Representative George Miller of California and Senator Edward Kennedy of Massachusetts, who will head panels overseeing labor issues. Both have said they will try to pass the Employee Free Choice Act, which would force companies to recognize unions when employees sign a card expressing their desire to organize.”
And Democratic Senator-elect James Webb of Virginia, according to Bloomberg
, “says Wal-Mart is a symptom of the failure of U.S. trade policy, which penalizes American workers and industries by flooding the market with cheap imports and making it too easy for companies to export jobs overseas.”
One step forward, two steps back.
The New York Times
reports this morning that Wal-Mart is seeking ways to show its appreciation to its 1.3 million US employees. According to the Times
, “Wal-Mart managers at 4,000 stores will meet with 10 rank and-file workers every week and extend an additional 10 percent discount on a single item during the holidays to all its employees, beyond the normal 10 percent employee discount.” The company also is giving employees a special polo shirt when they’ve completed two decades of service.
But even these efforts ring hollow for some Wal-Mart critics, who point out that there is a growing perception within the company that management is disconnected from the concerns of its employees, and that it has created “robotic,” formal (and some would say ultimately unresponsive) responses to concerns about staying home with sick children or dealing with family emergencies. And not everybody seems impressed by a knit shirt.