Wal-Mart tries to woo the press
As the retail behemoth readies for a two-day media conference, it hopes to offset some damaging public relations setbacks.
By Parija Bhatnagar, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - Once upon a time, Wal-Mart couldn't have cared less about the media. Now, for the second year in a row, the once notoriously media-shy retail powerhouse is laying out the red carpet for the press corp on its home turf in Arkansas.

What the press wants

And analysts speculate that the tone of this year's gabfest, slated for April 18-19 in Rogers, Arkansas could be decidedly different from last year.

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"My sense is that last year's event was more of a lecture by Wal-Mart (Research) to the media about why [the chain is] good for America. I think this year it's going to be more consultative. I expect Wal-Mart executives to ask reporters what they would like to get more information about from the company," said Mark Husson, analyst with HSBC.

At the same time, industry observers caution that Wal-Mart's efforts to get warm and fuzzy with the media are simply a means to protect its image amidst damaging public relations setbacks, like the blow it suffered in Maryland earlier this year after the state became the first in the country to set a so-called "Wal-Mart healthcare bill," in response to what critics say is Wal-Mart's inadequate healthcare coverage. The law will fine big companies for not picking up their fair share of employee healthcare coverage. [See Related Stories box]

To that end, the retailer has become more proactive in publicly disclosing information about the company's wage, benefits and hiring policies, the three areas where the company faces the most aggressive backlash from its critics, including union-funded watchdog groups Wake-Up Wal-Mart and Wal-Mart Watch.

Wal-Mart, the largest U.S. private-sector employer with 1.3 million employees in the United States, recently released data for the first time that detailed how many women and minorities it employs.

However, union activists may be disappointed to learn that it's the Wal-Mart shopper - and not its labor policies - that company executives will focus on during their presentations.

According to Wal-Mart's conference agenda, chief financial officer Tom Schoewe's presentation Tuesday afternoon is entitled "If you're not focused on the customer, you are not focused on growth and return on investment."

Indeed, the challenge for Wal-Mart is that although it's the world's largest retailer with $315 billion in annual revenues, both its sales and profits growth have slowed.

Later that day, Eduardo Castro-Wright, president and CEO of Wal-Mart USA, will talk about "Improving the customer's shopping experience." Castor-Wright, formerly CEO of Wal-Mart's Mexico unit, Wal-Mart de Mexico, was promoted to his current position early this year.

A new Wal-Mart experience

Analysts said Castro-Wright's presentation is the one to watch, since he's the one tasked with improving slowing sales at Wal-Mart stores, as well as revamping the shopping experience for customers.

This includes everything from redesigning stores and updating merchandise to attract a higher-income shopper to removing store clutter and reducing the long lines at the checkouts which can result in lost sales as frustrated shoppers abandon their shopping carts.

John Fleming, Wal-Mart's chief marketing officer follows Castro-Wright. He's expected to talk about "What customers want."

On day two, the focus shifts to Wal-Mart's role in communities where it seeks to do business. Executives are likely to talk-up Wal-Mart's new "jobs and opportunity zones," initiatives that it claims are geared to help local businesses and add jobs to downtrodden areas.

Labor issues finally get some attention when Susan Chambers, Wal-Mart's executive vice president of benefits administration, takes the podium Wednesday morning.

Union groups went after Chambers late last year after Wal-Mart Watch released a Wal-Mart internal memo in which she suggested to the company's board of directors that Wal-Mart could hold down spending on healthcare and benefits if it hires more part-time workers who aren't immediately eligible for healthcare coverage. She also advocated wooing younger, presumably healthier workers and discouraging unhealthy people from working at Wal-Mart.

Last but not least, CEO Lee Scott should tie up any loose ends as the conference's final scheduled speaker, with a presentation titled "Change, growth and success for Wal-Mart and the working families we serve."

HSBC's Husson said he'd be interested to know how Wal-Mart plans to accelerate its overseas growth strategy, which he identified as one of the most critical issues facing the retailer in the years ahead as the U.S. market grows saturated. Wal-Mart already operates more than 3,800 U.S. stores.

"I want to know what their vision is for 2015 when 40 percent of Wal-Mart's sales will come from overseas, versus 20 percent today," Husson said.

Paul Blank, WakeUpWalMart.com's campaign director, said his group was planning to crash Wal-Mart's media party with "a few events" but declined to offer further details. Representatives from Wal-Mart Watch were also heading to Arkansas to pitch their case against Wal-Mart to the media.

Todd Jones, an analyst with investment firm PNC Advisors, which holds Wal-Mart stock in its $50 billion portfolio, said he perceived the media conference to be a positive for Wal-Mart.

"I think it's in Wal-Mart's best interest to portray its business in a positive way to the public. Last year's conference was a step in the right direction," said Jones. But he specifically wants to hear Wal-Mart's game plan to improve its merchandise, and how it intends to get customers to shop for higher-priced and higher-margin items like electronics, in addition to food and household products.

"Wal-Mart hasn't had much success in this area yet. I want to know how they intend to revamp their product strategy while staying focused on being a low-cost provider," said Jones.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.