Walmart's Bad Week

Posted by: David Kiley on April 1, 2008

Just when Walmart thinks its on a roll, bad headlines about its behavior toward employees or small towns faded to the background, it gets pulled back in like Al Pacino to the family business.

The National Advertising Division of the Better Business Bureau says Walmart’s ad claims that consumers can save $2,500 a year by shopping at Walmart turns out to be bullhockey.

Turns out the claim, based on a dubious (in my opinion)Global Insight study, made the claim based on shopping at all stores in a market after the presence of a Walmart drove prices down at competing retailers. Oops.

The NAD in its statement said the implied claim in the ads was precisely that: “Families that shop at Wal-Mart will save $2,500 per year more than families [that] shop at other stores.”

And then there is Walmart earning Worst-Person-in-the-World status from MSNBC’s Keith Olbermann. The retailer successfully sued a former employee, paralyzed and in need of 24-hour care from an automobile accident, to lay a claim on more than $400,000 she received from the trucking company that caused the accident. Walmart sued the lady on the basis of recovering medical expenses Walmart insurance paid for. The company sued the lady for more than the settlement provided, meaning her estate would be bankrupt and at least some of her residual property would have to be sold to make up the difference. The kicker was that the lady’s son was recently killed in Iraq.

Only after the company was pilloried for its hubris did it relent and announce it wouldn’t clean the lady out.

Having once been a public relations executive myself, let me just say…way to stay ahead of your PR problem!!

Is there no communication between the legal side of the company and the PR/Marketing side of the house?

Reader Comments

pwm411

April 2, 2008 4:53 AM

I am so sick, and tired of hearing stories about how wal-Mart treats their employees. Wal-Mart needs a good kick in the pocket book for their crimes against humanity. I am spending my money at another store from now on. These people have the idea that they are the only game in town. Grow-up WAL_MART!!!!!!

R. Glantz

April 2, 2008 8:44 AM

"Comfort the afflicted, afflict the comfortable."

Go Keith!

Jonathan Salem Baskin

April 2, 2008 9:03 AM

I agree...the amazing thing isn't that Wal-Mart crossed that thin, vague line between acceptable implication and disallowed suggestion in its ads, but that it chose to base the campaign on the $2,500 number in the first place (there's such negative context around it). Also, isn't it a bit odd that there's no subsequent detriment to the business other than having to swap out the ads for other ones? Anyway, I've written about this a bit at DIM BULB if you'd like to check it out: http://dimbulb.typepad.com/my_weblog/2008/04/wal-mart-lied.html

freemarketer

April 2, 2008 12:00 PM

In February 1985, Walton wrote 3,000 American manufacturers and wholesalers to announce that the chain wanted to buy more American goods. Walton said: "We cannot continue to be a solvent nation as long as we pursue this current accelerating direction. Our company is firmly committed to the philosophy by buying everything possible from suppliers who manufacture their products in the United States." Today, however, over 80 percent of Wal-Mart's 60,000 global suppliers are based in China. [Wal-Mart Press Release, 3/13/85; Wal-Mart Literature, 1994; PBS Frontline, 11/16/04]
China's Eighth Largest Trading Partner. In 2004, almost 10 percent of everything imported to the United States from China was imported by Wal-Mart -- making the company, if it counted as a sovereign nation, China's eighth-largest trading partner. [Business Week Online, 10/7/05; Charles Fishman, The Wal-Mart Effect, 2006]

ABU U NO

April 2, 2008 6:14 PM

SO WE ALL SIT BACK AND CRY HOW WRONG WALMART IS MAKING PEOPLE LIVES, I THINK THE BEST THING WE ALL CAN DO IS STAY OUT OF THE STORES, IT WON'T TAKE LONG FOR THE MESSAGE TO HIT WHERE IT'S FELT.

Squeezebox

April 2, 2008 6:14 PM

The sad truth is that Same Walton did a bad job of hiring executives and a worse job of succession planning. His heirs and executives betrayed his values as soon as the dirt was shoveled onto his coffin. Wal-Mart prided itself on small-town values and running itself just a little better than the big boys in the big cities. Now they're being run by those same big boys and favoring those same big cities.

Marcus

April 2, 2008 7:51 PM

In 1986, 22 years ago, I worked at an organization that represented American companies that make automotive parts, as well as accessories like floor mats and seat covers. For years there had been a system in place where these manufacturers hired sales reps to go across the country to stores to sell their products. Well, Wal-Mart refused to work with the reps because they wanted cheaper prices and not to have to work a salesman's commission into the equation. They refused to work within the framework. You got a cheaper price on your floor mats if you bought them at Wal-Mart, but your neighbor who sold the floor mats to Target and Wal-Mart and Pep Boys probably lost his job. What good are cheap floor mats if you don't have a job? This is one industry, one tiny item sold at Wal-Mart stores, and that was 1986. Wal-Mart has robbed many industries. It has strong-armed many companies into doing business its way. So you can have cheaper crap that's now made in China? So your uncle or nephew or cousin Louise lost her job to someone in Pakistan who makes 8 cents an hour? When you shop at Wal-Mart -- and all stores like it -- you support this. Buy American and buy at stores that have decent relations with workers. Otherwise, you are part of the problem and you are robbing the next handicapped lady who lost a patriot son in Iraq of HER money to live on.

RPWC

April 3, 2008 12:47 AM

I happily shop at WalMart. I save lots of money. I look at the people that work at WalMart and thank the lord that they are employed. Stop bashing a company that saves people tons of money and employees thousands of the less fortunate AROUND THE WORLD.

Jim Dorsey

April 3, 2008 9:37 AM

Global Insight's year-long study on the economic impact that Wal-Mart has on U.S consumers was vetted every step of the way by three independent economists --- the retired President of the Federal Reserve Bank of San Francisco, a senior fellow at the Brookings Institution and a resident scholar at the American Enterprise Institute. They reviewed our work, our methodology, our conclusions and confirmed them as accurate. Far from "dubious," our results measured for the first time the enormous impact that this dramatic transformation in retailing is having on the economy. Mr. Kiley's flat-earth society argument doubting the consumer savings resulting from the presence of Wal-Mart in the marketplace conflicts with the quantitative analysis that supports the findings in our study.

Bob

April 3, 2008 5:36 PM

It goes on and on...I am a local Union Carpenter that have been laid off for 3 months and am now spending my time picketing Walmart because they have hired an out-of-state constractor and sub-constractors to do a large re-model of our local Walmart!

billwv

April 4, 2008 1:33 PM

At one time the government broke up, AT&T,SUN Oil, now it is about time they break up Wal-Mart for their practices that continue to put both small and large businesses out of business. They are intent to lie and force all american businesses to China which is the only place that treats it's workers worse than Wal-mart. The suffering that this company causes is just plain wrong.

Tim

April 4, 2008 1:44 PM

I response to RPWC. Maybe what you think your saving on at Wal-Mart hasn't broken yet. I have found on many items purchased there, made over-seas, aren't worth the savings in the long run. Buy a chinese made tool, save $20, and re-purchase it in three months. Even most of thier so called US made stuff is seconds no other sane supplier will sell. Over the years, I have pretty well figured out what is worth purchasing at Wal-Mart, and what is worth spending the extra to buy else where. Needless to say, 85% of my spending does not go to Wal-Mart.

john.k

April 4, 2008 2:43 PM

Jim Dorsey:

"Global Insight's year-long study on the economic impact that Wal-Mart has on U.S consumers was vetted every step of the way [by] the retired President of the Federal Reserve Bank of San Francisco, a senior fellow at the Brookings Institution and a resident scholar at the American Enterprise Institute"

So, in other words, you admit this was a partisan fat-cat sham of a study by pro-Bush/neocon think tanks!

Michael

April 7, 2008 9:53 PM

Does Walmart mistreat their employees? In a word, Yes. Speaking as a current employee I could give you many examples. Your life span at Walmart is approximately 5 years, unless you happen to be management. After five years you are earning "top" money. Poof ~ you are fired for "cause" and they hire a brand new person who will be making much less money. I know my time is numbered and I only hope that in my small New England that the job situations improve. For many years I was a computer tech on a hot line. All those jobs are now overseas where people earn about $4.00 per hour. I don't want to work for Walmart and immerse myself in it's culture, but I frankly have NO choice.

Get real people. I see you in my store at all hours. You tell me how much you hate coming to Walmart but YOU BUY AND BUY AND BUY. Who is really to blame, Walmart or YOU.

Think it over folks.

Leon A Davis

April 12, 2008 2:37 AM

Something I rarely admit to anyone, ever, but I worked for Walmart for a time. I made every excuse I could think of for their rotten behavior toward me and other employees, but I finally concluded that at it's heart, Walmart is just flat evil. Walmart has always had an adversarial relationship with its vendors, its employees, and its customers. I wouldn't hire the average Walmart manager to mow my lawn. And I wouldn't go back in one of their stores if they were giving stuff away. Here's a little factoid to chew on. Walmart has something like a million and a half employees. They churn about 60% of their workforce so they don't have to pay them extended benefits. That means that conservatively, Walmart dismisses 800,000 employees per year. I would guess three-quarters of those ex-employees have had a negative work experience. And of those, possibly half really grew to hate the Walmart culture. Include me in that category. Now what company can hope to gain any sort of community good will when they turn loose every year, into the larger population, 250,000 people that really, really don't like them. It's not for nothing that Walmart has far and away the highest internal theft loss in the retail industry. One of the loss prevention managers told me that an average Supercenter loses over a million dollars per year just to employee theft. Treat your employees like crap, bully them, lie to them, sexually harrass them, pay them peanuts, then act surprised and offended when they rip you off?

karlito2

April 16, 2008 10:17 PM

Folks, get a life! You bash Wal-mart because you are mad that you can't get hired or you got terminated. This is a great company and people don't know the facts and are talking crazy. Target imports more goods than Wal-mart and sells them at a higher price. Why are you not complaining about the high prices at Target? It's the same goods but at a higher price. Every consumer has to make their own decision of how and where they choose to spend their money. If you choose to boycott Wal-mart and spend more money at other stores then stop complaining and do so. There are a lot of companies going out of business and/or going on strike and with the economy in bad shape, this is not good for their families. Where is the Union now? What can they do to help these families? NOTHING.....they can only negotiate but no gurantees. People better wake up and realize that Unions are a thing of the past and is not good for the present or the future. Don't get mad at a company for getting a better price to do business with. If you owned a company, you would make the same decisions if the return on investment is there. If you can honestly say that you wouldn't make that decision, then it's probably good that you don't own a company or CEO of a company! Every company has good and bad things that takes place, but overall Wal-mart is good for the consumer and the economy!

Consumer

April 20, 2008 11:48 PM

Folks,
If U think Wal Mart is a boogey man wait till they open the borders to Mexico & Canada.
Also, these employees that are treated so badly why don't they get a different job?
As for buying products from Foreign Countries we now live in a global economy.
As far as Unions the Baby Boomers were rather lax in supporting them & big business picked up on that
Just be happy U are living in the US & buy at whatever store U want.
If U want a job making big bucks get more education or get a specility job.
I don't see why Wal Mart has to be a Welfare store & pay everyone top dollar because if they were worth so much money they wouldn't be working at Wal Mart.
But every one gets on the net & bashes Wal Mart & then goes to Walmart to get stuff they want as it's the cheapest store in town.
Start a National campaign not to shop &/or work at Wal Mart & see how U do.
Seems to me Sam had a very good idea
when he started his stored in 1968. So if no one shops there or works there,POOF, Wal mart is history & U can go back to paying higher prices for your goods & an awful lot of people will be out of work.
Good Luck

Xiao lin

May 3, 2008 11:52 PM

Consumer must be out of their mind, we are spending more on everything! Gas, flour, eggs, milk,rice, bread. The longer company's like WalMao stay on top the more it will cost our bottom line. And every time some one says Global Economy an angel get's gas pains. It is that hard to digest how people could turn their heads at what happens at these places in our Global Economy. I know it's not the Consumers issue children are working or women are being sexually assulted by there bosses or people are not able to feed their family's on two dollar's a day. I mean hey I saved a buck twenty five on toilet paper. After all their not real people their laborers. So if it's between paying more so that we can go back to a middle class with out the crunch sign me up. I look at it as an investment into worker's in the US and abroad. And as for alot of people being out of work if WalMao closes, are you kidding me! Have you seen a increase in the amount of jobs in the US every since China was able to get the most favored trade nation and WalMao was able to get most of their good's made there. If WalMao closed It would be a great day. Just think if we spent our money at stores that make people their business like Costco or Whole Food's or Horizen. Sure we spend a little more money but we get a better product, employees get paid more, they are able to buy things and they pay more taxes so people in city services such as fire department and police are able to work. It's called the circle of employment. Or if you like the more people that get payed the more they can pay other's. The WalMao option is don't pay now pay later. Like when you lose your job because no one can buy what your selling, then you can get a job at WalMao and get paid for your support.

Niles Nelson

May 21, 2008 6:26 AM

Okay, for all the "well off" people out there that never had to take a job like this because karma just shines on them, here's my opinion as a walmart consumer and employee. Great store to shop at. Horrible place to work. Not all the managers are terrible slave driving scum-bags. The store manager at our store for instance is a really fair boss. However, some of the assistant managers (Karen) are not. So far I have been physically assaulted by a toothless hag, cursed at by a bi-polar half-a-retard, screwed out of my benefits, hired initially at a rate of less than my minimum asking salary, made to work like a dog. Denied my raise of 40 cents (oh no!). I've been fired and re-hired more times than I can remember. Once for having surgery, Which I provided a doctors note for. Once for having a coffe in my hand during work hours. They called it "stealing time" I call it "It's two in the freaking morning and I need to wake up." They play up the benefits there, yet practically the whole night crew has no teeth. Dont get me wrong, I dont blame walmart for everyones personal problems but alot of these issues stem from work. I was also withheld a weeks worth of wages because the overnight manager kept forgetting to in-put my hours into the system. The result: couldn't pay rent for a month and barely ate. Woops! sorry Niles right? Nope! Not even. No apologies, no thank yous, no social ediquette or morals. Nothing. Just like my check. So basically the price is right... but at what cost?

Rick Cazmarzak

October 4, 2008 1:13 PM


My Wife worked for Walmart for 10 years, they just fired her for missing too much time, yet she still had 17 hours of sick time left and 4 hours of vacation on her final paystub.

She was never coached or written up, which is SUPPOSED to be walmarts policy of how to fire people. They never once told her , if you miss any more time you will be terminated. Instead they started counting Family medical leave time against her and time that she had taken 9 years ago, for deaths in the family.

They had her training people to become dept. managers, and when she finished traingin the last one, she was gone. SHe made 13.29, and was made overnight associate of the month, so you can't say she wasn't a great worker(which by the way, she was told all the time).

Hell, they told her the day she was fired by some 23 year old know it all, that she was HIGHLY recomended for re-hire-in 60 days at a lower rate!
Not to mention that they have fired and rehired more people at her store for far worse things than she ever did, which really was nothing but make too much money!

Friggin Fedup

October 10, 2008 10:01 PM

Walmart is one of the worse places you'd ever want to work for. The stress is unreal. I'm a cashier & was told in order to go to the bathroom, I must enter a code into the register, and they will decide whether or not I can go. Help! I'm an older woman whose had problems with my bladder, and told them that not allowing me to use the bathroom violates my rights & now I'm being bullied, harrassed & told I will be fired for insubordination if I don't comply! THOSE DAMN IDIOTS ARE VIOLATING THE U.S. FEDERAL REGULATIONS FOR TOILET FACILITIES 29 CFR 1910.141(c)(1)(i)! AFL-CIO, OSHA, Department of Labor! Will somebody please help us!
P.S. This rule is what they coined "policy." Signed, The Older Women At SuperWalmart, Severn, Maryland

wow

November 14, 2008 1:13 AM

wow. this is real madness. i know its alot of jobs, but someone really needs to check up on Wal Mart and see what theyre up to. If its bordering on illegal why hasnt anything been done as yet? the owrst could happen is that people are treated better...

Kenny

February 7, 2009 8:21 AM

Little late to the Wal-Mart bashing party, but I work at the local Home Depot as a kitchen designer, and we currently have several associates that worked at Wal-Mart in the past and they all say nasty things about their former employer, i.e. hours, benefits, un-fair firings, etc. But these are things you'd expect to hear from FORMER employees. Ask a current employee that isn't currently having a totally bad working experience, and they'll tell you the same types of "war-stories" that you'd hear from any mega big box retailer. I choose to work for a large corporation. I'm a salary, a sales report and an employee number to the CEO's and other officers (for the most part), and alot of what goes on in these places are the same, Wal-Mart is just the biggest. Wal-Mart, like Home Depot, hires "from the inside" for it's management and alot of it's corporate positions, and if you prove yourself as a viable employee, you'll typically get rewarded with better jobs, better wages, etc. I also believe that in the United States, the world's model for a democratic, capitalistic society, when C.E.O.'s have about the same amount of power over society as the president of the U.S., you're going to get the same type of formulaic, dollars before sense mentality that keeps these large companies large. And being capitalist (which all of us are inheritantly, right?) we're going to go to the place that keeps OUR bottom line lower just for survival and the luxury of spending that un-used savings somewhere else... or back into that same place where we get "more for our money". In the end: if you don't like what you're experiencing, it isn't just one company, it's all of them, and you may want to think about moving to a country that's a little more "socialist", ala "free" health care ridden Canada!!! P.S. - In Canada, EVERYTHING is more expensive AND you pay sales tax and health care tax on every purchase. So much for "free". P.P.S. - my fiance is a cashier at the same Severn, MD Super Wal-Mart that the woman with bladder problems works at and she gets overlooked for breaks too. It happens at my work too, and it could happen at alot of jobs, no just Wal-Mart. Wear "Depends" like alot of the customers do and you'll be fine. j/k about that last line. :)

Post a comment

 

About

News, opinions, inflammatory meanderings and occasional ravings about the world of advertising, marketing and media. By marketing editor Burt Helm, Innovation Editor Helen Walters, and senior correspondent Michael Arndt.

BW Mall - Sponsored Links

Buy a link now!