My fellow bloggers have weighed in on Wal-Mart Stores Inc.'s (NYSE: WMT) "Threat Research" operation, calling it "paranoid" and questioning whether it made any "sense." Let me add a third word to describe this Keystone Cops operation: wasteful.
Wal-Mart has the right to defend itself against criticism. It has the right to make sure that employees aren't violating company policies. But does the world's largest retailer need its own mini-FBI? No.
The company seems to be worrying more about silencing critics and punishing misbehaving employees than about selling goods that people want to buy. What's funny is that the company's obsessesion with controlling its image and penchant for secrecy seems to continually backfire.
The Wall Street Journal story about the "Bat Cave" make Wal-Mart look petty and cheap at a time when it's trying to win back customers that have deserted its stores for Target Corp. (NYSE: TGT) and other competitors. Investors have backed Target as well, sending its shares up about 18 percent over the past year compared with 4 percent for Wal-Mart.
Wal-Mart has got to ask itself whether the information it gains from its "threat research" is worth the bad feelings it creates with customers, shareholders and employees. If Wal-Mart wants to repair its reputation, it needs to be more forthcoming about why it does what it does.
Maybe then it won't need a secret 20-person department to investigate threats both real and imagined.











Reader Comments (Page 1 of 1)
4-04-2007 @ 5:11PM
bernie mcfadden said...
It is true that Walmart would have been wiser to avoid secrecy in its attempt to ward off the vicious anti Walmart campaign of the union inspired attacks of the last few years, but it is equally true that Walmart needed to fight back somehow. The fact that more people shop Walmart than all other retailers shows that they have the truth on their side when itcomes to where and how America loves to shop.
4-04-2007 @ 5:10PM
Chicky said...
Jonathan,
With Wal-Mart's creepy, even criminal reputation, shouldn't the SEC investigate the "reasons" Wal-Mart would spy on their shareholders?
I'd be very interested to see all of the insider activity within the company! Apparently, they can't be trusted to do anything right, let alone legal.
4-04-2007 @ 5:11PM
Lisa M said...
As if I already wasn't boycotting Wal-Mart? The chaotic, tacky atmosphere in their stores is reason enough to avoid the place. It shouldn't take a "threat research team" to figure out why Wal-Mart is losing market share. Even without all the scandals and bad publicity surrounding Wal-Mart, there's plenty Wal-Mart could do to improve its customers' (and potential customers') experiences.
4-04-2007 @ 7:24PM
bayridgebs said...
I can't believe these comments critical of Wal-mart because the company tries to protect it's shareholders and reputation. We all know that Unions are spending fortunes trying to discredit Wal-mart.I go out of my way to shop at Wal-Mart
4-04-2007 @ 7:25PM
Chicky said...
Bernie says: "The fact that more people shop Walmart than all other retailers shows that they have the truth on their side when itcomes to where and how America loves to shop."
No, it just demonstrates the large number of stores (debt). That's why SSS's figures are the way we measure the success or failure of a retailer.
Besides, many of us Americans have been appalled by the behavior coming out of Bentonville, not to mention the jury verdicts! That's why Wal-Mart is suffering.
Frankly, the same store sales numbers are telling the story. You just have to read them objectively. As a good friend always said, never fall in love with your investment. This is one of those times when shareholders would be wise to take an objective look at their holdings.
Besides, the unions have absolutely nothing to do with Wal-Mart's shoddy management.
4-04-2007 @ 7:46PM
Chicky said...
BayRidgeBS said: "We all know that Unions are spending fortunes trying to discredit Wal-mart.I go out of my way to shop at Wal-Mart"
You just made my point! Thank you. If you are the CEO and KNOW you're under scrutiny, isn't it a good time to adopt some zero tolerance policies? Or do you continue to blame the unions? Wouldn't a good strategy be to train your store directors and department managers as to labor law? True, you might actually have to pay a little better, but that's one example.
Seriously, I've worked in retail as well as management. I have never seen such denial and blame. This company needs some real talent if it's not too late already. I think their image problems are too much to recover from.
4-04-2007 @ 10:11PM
Dave Straitjacket said...
This is disturbing news. If you recall a few years ago, there was a story about the company having something called "COLI's", Company Owned Life Insurance, on associates. This was done without the associates knowledge and the company was the beneficiary. Makes you wonder what's next? Corporate hit squads?
4-08-2007 @ 7:44PM
RatAttack said...
In addition to Wal Mart's "Bat Cave", I've also heard that they monitor their employee's cell phone conversations and make them (employees) sign what is basically a "No Privacy" waiver when they are hired. Can anybody confirm this? If so, it sounds like Area 51 employees have more freedom than do Wal Mart employees. I certainly won't be shopping at Wal Mart anymore.