In Defense of Wal Mart

The American Enterprise:

Is it reasonable to vilify major American companies in this way? In any given week, 140 million people shop in a Wal-Mart store. Wal-Mart is our nation’s leading employer. (There are 30 percent more people working under its roof than are serving in our Army, Navy, Air Force, Marine, and Coast Guard active-duty forces combined.) If Wal-Mart were a country, it would outrank all but 19 nations in economic size.

It’s apparent that the recent attacks against Wal-Mart have seriously distracted the firm from its central task of becoming a more productive company. After powering upward for decades, the company’s stock has fallen since the opposition campaign began (as I write, it’s down 21 percent in two years). Instead of making the tough, gimlet-eyed decisions that cause a business to bloom, Wal-Mart’s CEO now spends much of his time on PR sideshows, touting the introduction of organic carrots and other environmental sops, endorsing a minimum wage hike (irrelevant, since Wal-Mart’s average starting wage is already almost twice the national minimum), and otherwise talking up motherhood and apple pie in an attempt to counteract bad media.

Wal-Mart has also had to set up a fat D.C. lobbying and public relations octopus to defend against the war rooms being run by the Kerry and Dean assassins and union activists. Until recently, Wal-Mart’s lobbying budget was zero. Even after it finally hired its first D.C. representative, he was instructed to take lawmakers out to breakfast instead of dinner to minimize expenses. Now Wal-Mart has resorted to standard defensive lobbying and campaign contributions, and is throwing money at Michael Deaver and other malodorous “image consultants.”

All of this is completely antithetical to the company’s core philosophy of not wasting its customers’ money on frou-frou. For reasons of thrift, company execs, including the CEO, have always shared hotel rooms when they travel. Wood-panelled offices and such are verboten, allowing the firm to spend less than half the industry average on administrative costs. Super Bowl tickets and free dinners from suppliers are always turned down–because such costs would ultimately work their way back into the price of goods. Alas, today’s attack dogs are forcing Wal-Mart to become a more conventional company and unraveling some of the delightful idiosyncrasies that not only brought landmark economic success but also kept the firm close to its customers culturally.

« Previous Post

Next Post »