Yogi,
Victory is mine sayeth the Walmart boycotter:
washingtonpost.com
Wal-Mart's Damage Control
Longtime Price Message Takes a Back Seat To Blitz Designed to Mend Reputation
By Greg Schneider
Washington Post Staff Writer
Saturday, January 24, 2004; Page E01
The TV commercial opens with a young couple on a sofa smiling at their toddler son. As the boy nuzzles a stuffed animal and hugs his mother, his father explains that the youngster was born with liver disease and underwent two major surgeries by the time he was 7 months old.
"It's nice to know that I work for a company that would take care of everything we went through," the man says. The ad cuts to the man at work, wearing a familiar blue vest with white logo, as he says: "I don't think people know how great the benefits are at Wal-Mart. Without Wal-Mart, he wouldn't -- I don't know that he'd have made it. I don't know that we would have made it."
It's a dramatic tribute that says nothing about Wal-Mart Stores Inc.'s low prices or vast selection of products. Instead, the ad -- part of a series called "Good Jobs" launched last year -- is aimed at healing Wal-Mart's reputation.
Wal-Mart's surveys showed consumers mistrusted the company's labor practices and its impact on the community. Shortly after the ad began airing in late September, Wal-Mart suffered another blow when federal agents raided its stores around the country and arrested about 200 undocumented immigrants working on cleaning crews.
Now Wal-Mart is fighting back.
In a multi-pronged counterattack, the world's biggest company -- the most feared and powerful competitor in global retail -- is seeking to hang onto its image as America's friendly hometown merchant.
It is stepping up its slate of feel-good television ads in 2004, with more spots featuring happy employees as well as examples of Wal-Mart's community involvement. Wal-Mart has also sharply increased its political donations, becoming the second-biggest giver to candidates in the 2004 election cycle, according to the Center for Responsive Politics.
At the same time, Wal-Mart is accusing the federal government of a double cross in the immigration raids, saying the chain had been cooperating with immigration officials and had been assured it wasn't a target.
Also, Wal-Mart officials, who initially responded to the raids only with pledges of cooperation, now say President Bush's recent proposal to grant legal status to undocumented immigrants shows the issue should be one of policy debate, not criminal prosecution.
So far, the spirited defense is having little impact. Federal investigators are not backing down from their case, which is being heard in secret by a special grand jury in Pennsylvania. The company's consumer surveys show public attitudes toward Wal-Mart have held flat for six months. That's "not as good as we would like to do, but given the current environment, we're holding strong," said Alicia Smith Kriese of GSD&M, the Texas firm that created some of the TV ads.
Nonetheless, Wal-Mart's retaliation strikes some retail experts as crucial, because the company has reached a critical stage in its evolution. Grown far beyond its roots in the rural South -- with 4,300 stores, more than 1.3 million employees worldwide and $245 billion in sales in 2002 -- Wal-Mart's very success may be working against it. Big empires are hard to manage, and the public tends to mistrust institutions that get too mighty, said Kelly O'Keefe, head of Richmond-based Emergence, a brand consulting firm.
"They have to be extremely conscious that the kind of growth they have been delivering doesn't come without a cost," said O'Keefe, who put Wal-Mart on his annual top-10 list of corporate branding blunders for last year's run of bad publicity.
The company's omnipresence makes it an automatic target for complaints, lawsuits and now government investigations, said Kurt Barnard of Barnard's Retail Trend Report. Sooner or later such bad publicity can keep even a powerful retailer from continuing to grow, and can begin to erode shopper loyalty, Barnard said.
As its troubles have mounted, Wal-Mart has cranked up its political donations. Last year it gave just over $1 million as of November, the date of the most recent federal campaign contribution filings, according to the Center for Responsive Politics. The only organization to contribute more was Goldman Sachs Group, at nearly $1.6 million. That's a big leap for Wal-Mart, which ranked 71st in the 2002 election cycle and did not rank in the top 100 in 2000.
"Not only are we more aggressive in our communications these days, but we are also becoming more savvy in using government affairs," Wal-Mart spokeswoman Mona Williams said. "Our critics make an awful lot of noise, and we need to ensure that our side of the issues is heard as well."
After the Oct. 23 immigration raids, Wal-Mart retained Washington lawyer Martin Weinstein, a former federal prosecutor, to conduct an in-house investigation of its hiring and contracting practices.
What he has found, Weinstein said in an interview, is a history of Wal-Mart cooperating with federal immigration authorities dating to mid-2000.
"You don't usually have a criminal justice matter where the company has been cooperating and then the government begins to view it as a foe and less as a friend. That's odd," Weinstein said.
Almost all of the arrested workers were employees of outside cleaning contractors, and Wal-Mart had been trying to get rid of those contractors and move the janitorial work in-house, he said. But federal agents asked the company to keep some of the contractors in place for the sake of the investigation, he said.
In a memo dated March 6, 2001, provided to The Washington Post by Wal-Mart, a company security official described meeting with federal immigration agents about the investigation. "They identified specifically several companies that we have paid several million dollars to over the past 2 or 3 years, and believe that there are individuals connected with those companies that are the masterminds behind this operation," the Wal-Mart security official wrote.
According to the memo, the agents asked Wal-Mart to furnish a group of executives to become part of a federal grand jury task force investigating the contractors, who were suspected of not only hiring illegal immigrants but of overseeing theft rings.
"The agents made the point that in no way do they consider Wal-Mart as a target," the company official wrote. "They see the investigation taking several months and their possibly asking for our company's help with surveillance, taping, etc. They have guaranteed that no arrests would be made in the stores and we would be given heads up about publicity."
A spokesman for U.S. Immigration and Customs Enforcement, known as ICE, said he couldn't discuss the Wal-Mart case because it is under seal in a federal grand jury investigation in Pennsylvania. But speaking in general terms, ICE spokesman Garrison Courtney said the agency would not target a company that it felt was being truly helpful.
"If a company is cooperating we typically don't penalize that company because it's in the best interest of both the employer and our agency to have that cooperation," Courtney said.
The agency takes pains to make sure a cooperating company understands exactly how to avoid running afoul of immigration laws, he said. "But say you're doing the third or fourth or tenth audit [of that company], and you're seeing a pattern develop. They've been given a little bit of leeway before, and they take it again. So you go back and analyze, does this company seem to think they're going to keep getting away with this?"
If the cooperating company continues trying to skirt the law, he said, "you really have to look at the intent, the motivation. What they're saying versus what they're doing. . . . That's what determines are they really cooperating, or are they cooperating for themselves?"
Weinstein said Wal-Mart has continued to cooperate with investigators, supplying executives and documents to the grand jury investigation. A spokesman for the U.S. attorney's office in Pennsylvania declined to comment on the status of the investigation or on Wal-Mart's claims.
Weinstein also said he was perplexed by the government choosing to target Wal-Mart given President Bush's recent call for temporary legal status for millions of undocumented workers. "It clearly is an indication that the administration is concerned about the question of undocumented workers and that there is no absolutely clear right or wrong answer," he said.
Wal-Mart is looking into whether the potential policy change could affect the current investigation, but Weinstein said he couldn't discuss specifics.
Courtney again declined to comment on a particular case, but said the agency does not deal in policy questions. "We enforce whatever the law is on the books, and the law right now says if you illegally employ an illegal alien and we have proof of that, we can fine you up to $10,000 per person," he said.
While Wal-Mart is taking a stiffer approach with the government, it is working to soften its public image through two ad campaigns that began running early last year. One features employees offering testimonials about how well they've been treated by Wal-Mart, and the other tells stories about Wal-Mart's contributions to local communities.
Both originated from a survey Wal-Mart conducted more than a year before the immigration raids that showed Wal-Mart's reputation already crumbling in two areas: Consumers said they believed Wal-Mart offered only low-wage, dead-end jobs, and they thought its stores had a bad impact on surrounding communities.
"We attributed that to people simply not having the facts," spokeswoman Williams said.
The Austin, Tex., advertising firm of GSD&M created the employee testimonial campaign after collecting stories from workers in stores around the country. "This effort to show that Wal-Mart has good jobs -- to share the good news, if you will -- is important as one of several proofs of the fact that Wal-Mart is a good company," said Kriese, GSD&M's senior vice president.
Bob Garfield, a columnist at Advertising Age, said the spots are a smart strategy. "I'm embarrassed to say they work on me," he said. "Getting caught with illegals is really not good for your image when you're trying to convince people you're an integral part of the community . . . but in their ads the employees seem like just plain folks who want to help me find the right brand of paper toweling. . . . They're well positioned for the moment." |
