- The Washington Times - Sunday, April 3, 2005

NEW YORK (AP) — Wal-Mart Stores Inc. needs to spell out in its first press conference this week how it is dealing with issues that continue to dog it, from sex discrimination to wage and hour violations, image consultants say.

“They need to persuade people they are bigger than people’s attitudes toward them,” said Clarke Caywood, professor of public relations at Northwestern University in Evanston, Ill.

What’s important is for the world’s largest retailer to provide specifics about how it will execute better business practices, Mr. Caywood and other image professionals say.

Wal-Mart has a lot at stake. The Bentonville, Ark., company’s fast growth was fueled by its perception that it had the cheapest prices.

But now that formula is in jeopardy as critics charge that the retailer takes advantage of its employees and hampers competition.

It has had public legal problems, paying a fine to settle federal charges that underage workers operated dangerous machinery, and agreeing to pay $11 million to settle charges that its cleaning contractors used illegal immigrants.

It faces vocal opposition to some of its store openings. Such issues come as the discounter struggles with higher expenses and slower growth.

Despite Wal-Mart’s negative image, throngs of customers keep shopping at its stores, but that could change, image professionals say.

“Any retailer has to be cautious about consumers’ opinions of their business ethics and practices,” says Howard Rubenstein, president of Rubenstein Associates, a New York public-relations firm.

Wal-Mart’s image also matters for investors, who have seen Wal-Mart’s stock go nowhere the past two years as shares of rival Target Corp. have risen steadily.

“They should reveal what went wrong … and outline in layman’s language so that the public would understand this is a true apology,” Mr. Rubenstein says. If it doesn’t, “their business may prosper, but when you run into this buzz saw, you are courting trouble.”

Wal-Mart’s officials declined to be specific about what they will say to the approximately 50 journalists expected to gather at the conference.

The goal, said Gus Whitcomb, a Wal-Mart spokesman, is to “try to help journalists understand our business, how we do business, and about us as people.” He added that he sees this as more of “an educational opportunity” than a newsmaker event.

Although plenty of public-relations professionals applaud the rare two-day event, they also see risks. Wal-Mart, faced with dozens of lawsuits, has to be careful what it says and what it promises because it might not be able to deliver.

“This is clearly by Wal-Mart’s own admission a damage-control tour,” said Christy Setzer, a spokeswoman at the AFL-CIO labor federation, whose United Food and Commercial Workers International Union is trying to organize workers at some Wal-Mart stores.

“They are aware of a growing chorus of community leaders, environmentalists and religious leaders who are saying that Wal-Mart’s values are not our values. And they need to respond to this. It is telling that they would rather spend millions of dollars on PR efforts than to change their business practices.”

Wal-Mart clearly has ramped up a public-relations campaign. In January, the company bought full-page ads in more than 100 newspapers across the nation to spotlight its message that it provides opportunity for advancement and that its stores provide mainly full-time jobs that come with a broad benefits package.

Over the past year, it has hired big-name public-relations companies, including Hill & Knowlton Inc., to bolster its public-relations efforts.

In June, at its annual shareholders meeting, Wal-Mart announced it was changing its policies on pay, promotions and diversity.

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