The commercials are supposed to show employees describing cost savings for shoppers, the company's charitable donations, and its efforts to provide health insurance to eligible workers. One ad is featuring founder Sam Walton, although the ad is probably leaving out the part how, I think, Sam Walton would roll in his grave if he saw how the company is being run now.
These guys still aren't getting the message from either Main Street nor from Wall Street. The company needs to make a sacrifice and essentially start over. It needs a new clean and fun image and if what I read into the commercial descriptions was remotely at all the way this is going to come out, then Wal-Mart is just making itself continue to defend the same daily routine without making real changes to its image.
The company competes on price and price only, and that is the only customer loyalty the company has. The company needs to stop trying to defend itself and make some serious changes. Wall Street has actually dealt reasonably well with lower sales and a tarnished image, so the company needs to decide that it is going to clean house and make nice-nice with the public (and ultimately Wall Street). Its old "new store roll-out initiative" hasn't gotten much discussion at all and it needs to focus on that and how it is going to make the customer shopping experience better. It is going to ultimately have to make some sacrifices to profit margins in the stages with some new initiatives and what it should really do is actually listen to some of these anti-Wal-Mart advocate points without going instantly on the defensive.
I noted before that the one CEO in corporate America that most resembled Darth Vader (at least in the public eye) was Wal-Mart's Lee Scott and that he was one of the ten CEOs that needed to go. I noted the same about Bob Nardelli of Home Depot back in December too. The board needs to gang up on Lee Scott and get him out of there, and if not, some of the bigger shareholders need to start rattling the cages with the Walton heirs to protect their billions of dollars. The CEO of Wal-Mart needs to be able to start conveying care and fun, and it is obvious Lee Scott is not going to ever be able to fit that bill.
As long as the economy isn't at the point where ALL Americans are watching expenses down to a penny, customers want "greater shopping experiences" now instead of "only lowest prices." This is really just part of the business cycle of a company that has reached a pinnacle, but it can take some steps now or can allow the business and history books use it as a case study about how it grew and grew before entering a long-haul faltering period.
This seemingly never-ending saga reminds me of the problems that were starting in 2004 when I was living in Chicago and saw the magazine cover for Conscious Choice titled Wal-Mart Ate My Neighborhood.All of this was even before the Goldman Sachs analyst note this morning downgrading the firm's Buy rating down to a Neutral. Lee Scott needs to go.
Jon Ogg is a partner in 24/7 all St.,LLC; he does not own securities in the companies he covers.
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Reader Comments (Page 1 of 1)
1-08-2007 @ 3:43PM
Duane D said...
Jon Ogg hasn't a clue what he is reportin on.
1-08-2007 @ 7:05PM
Mike said...
Amen. Just reporting the same babble that the media outlets spew from Wake Up Walmart press releases. Requires no independent thought or investigation.
1-08-2007 @ 11:20PM
BetteD said...
since when don't shoppers want low prices.....it doesn't matter what my income is....I want value for my dollars...WalMart provides that....Sam Walton expected his employees....excuse me...ASSOCIATES to have a work ethic ....many jobs at WalMart aren't of a level that you would expect them to be jobs that could support a family.....who expects to be able to support a family of 4 by being a cart pusher or stocker or greeter???? work your way up the ladder and you can earn enough to support a family...and it will include a medical program a profit sharing plan a 401K plan a stock purchase program and a bunch of other benefits....stop complaining about WalMart...
no one is MAKING anyone work there!!!!
1-10-2007 @ 9:43AM
Meri Bushey said...
Mr. Ogg knows far more than you realize.WM needs to change its behavior before it can change its image.
I have been an "associate" for over 4 years and have seen the tightening grip of the Arkansas home office trying to squeeze the life out of its employees. Many jobs aren't designed to support a family, that is true. I did work my way up to dept. mgr. It took two years. I can go no further.
Home office controls everything and there are many excellent workers with strong work ethics that are totally frustrated at the restrictions placed on them. They get the same pay raise that those who do little above their abilities.
As dept mgr, I have begged for help to do my job correctly and efficiently but it has fallen on deaf ears. This past Christmas season, as in the previous one, they did not provide the much needed assistance to to handle the extra products and promotions to enable me to still take care of my dept. Instead, they released the temporary help two weeks before Christmas because their payroll did not meet with sales. Consequently, I could not get product out to sell which would have increased sales.
Home office dictates everything from how many employee hours are to be spent in each dept right down to the thermostat controls in each store- no matter which state your store is in. Many of their decisions counter the reality of retail selling. They stress customer service then dictate what you can and can't do to provide it.
Lee Scott does need to go. His dictatorship is taking the company well away from the ideals of Sam Walton who actually held a value on his employees. The more independant, enthusiasic and resourceful you become the more WM clamps down on your productivity. The benefits really aren't as wonderful as Bette thinks. The first year of medical does not cover anything pre-existing, mammograms, or even a basic pap smear. You must wait until the second year for those. The choice of plans is very restricted and considering their rate of pay, are too expensive for many to afford.
So, yes, Mr. Ogg is right. WM needs to fix their problems and not gloss them over with expensive ad campaigns. The money spent on that would go a long way and better improve their image if it was spent on those who break their backs making the almighty dollar for the company.