November 22, 2006

Wal-Mart: THAT Was Fast, and THIS Is More Like It

Filed under: Business Moves,Economy — Tom @ 12:19 pm

The folks in Bentonville faced a holiday-season disaster — and blinked …. and apparently went further into a thorough reexamination of where they are and what they are all about.

About 24 hours after Don Wildmon’s American Family Association called for a Friday-Saturday boycott of Wal-Mart and Sam’s Club (fourth item at “Couldn’t Help But Notice” link earlier this morning), the company formally backed off, with astonishing comprehensiveness:

Respect for the individual is one of the core values that have made us into the company we are today. We take pride in the fact that we treat every customer, every supplier and every member of our individual communities fairly and equally.

….. Wal-Mart will not make corporate contributions to support or oppose highly controversial issues unless they directly relate to our ability to serve our customers.

Wal-Mart does not have a position on same sex marriage and we do not give preference to gay or lesbian suppliers. Wal-Mart does have a strong commitment to diversity among our associates and against discrimination everywhere.

The AFA has called off the boycott, and is urging its members and other to send a note of thanks to Wal-Mart.

Say what you will about the propriety or impropriety of gay-agenda causes, the point that Wal-Mart finally seems to get, after spending a large portion of 2006 losing (and losing, and losing, and losing) its way, is that its primary mission is to be a money-making business enterprise providing a fair return to its shareholders. It finally seems to realize that it will achieve that return by aggressively competing, while in the process pleasing its customers and providing employment and career opportunities for its employees.

Of course, how the company behaves over the long-term is the real test, but if the company’s other announcement yesterday is any indication, all I can say is “That’s more like it!”:

Wal-Mart Slashes Food Prices, Targets Grocers Ahead of Thanksgiving

CHICAGO — Two days before Thanksgiving, Wal-Mart (WMT) slashed prices on hundreds of grocery items, a welcome break for consumers but the first shot in what is sure to be a price war between mainstream grocers and the largest seller of food in the United States.

Wal-Mart, also the world’s largest retailer, has already cut prices on toys, appliances, electronics and apparel to attract more holiday shoppers. The retailer also recently initiated a $4 generic prescription drug program that threatens pharmacy chains.

Now, it is trimming prices on hundreds of fresh and dry food items.

The retailer said that the price of many food items would be lowered by as much as 20 percent. Some items were discounted more heavily.

The company appears to have returned to being the “always low prices” retailer (almost) all of us know and love. Milton Friedman, who understood that “The Social Responsibility of Business Is to Increase Its Profits,” is surely smiling down on all of this.

_____________________________

UPDATE: I have had my differences with Wildmon’s AFA in the past, as I think the boycott weapon is best used more selectively than it is employed by AFA (Wildmon also occasionally makes really dumb choices in backing political candidates). But there’s no denying the Friday-Saturday boycott threat hit the bullseye. I realize this wasn’t AFA’s intent, but with their apparent success at shaking Wal-Mart to its core, Wildmon and his group may have done more to lengthen the economic prosperity we’re in than any other single entity, including the government, has done in all of 2006.

UPDATE 2: How important is it that the Wal-Mart economy-stimulating express keeps running? From today’s OpinionJournal.com, in a column about free trade by Pete DuPont:

A recent Global Insights analysis concludes that Wal-Mart’s 1985-2004 expansion of sales resulted in a 9.1% drop in the price of food at home, a 4.2% drop in the price of other goods and commodities, and a 3.1% decline in consumer prices overall, saving the average working family about $2,329 per year. And with that came a net increase of 210,000 Wal-Mart jobs in 2004 alone.

Share

8 Comments

  1. Family groups such as Wildmon’s are the prime reason that I could never share the Republican Party’s big tent. There isn’t enough room for my sense of respect for individual rights and their BS.

    Wal-Mart is salivating over the prospect of expanding into urban markets, and this sort of kowtowing to the religious right won’t be much of a help. While social responsibility should never be an end for a corporation, it can be a very effective means.

    Comment by Kevin — November 22, 2006 @ 12:51 pm

  2. #1, if it were a kowtow, WM would have taken the meter past pointedly neutral, but did not. I think the co. just came to its senses.

    I suspect some are disappointed that WM did not repudiate the so-called gay agenda, but that is not any concern of the company either.

    The point is that WM should have stayed neutral all along. The company does not have time, money, or management energy to waste on PC causes, right or left.

    Comment by TBlumer — November 22, 2006 @ 1:18 pm

  3. Family values (anti-abortion, pro-traditional family, anti-same-sex “marriage,” etc.) are some of the key reasons why I remain stalwart in my support of the GOP. Don Wildmon and AFA may not always have it exactly right, but they are right way more than they goof. More power to them! I’m so sick of the PC BS that’s so prevalent in our society and political culture I could throw up on some libs shoes!

    Comment by Excelsior — November 22, 2006 @ 1:48 pm

  4. It could be very beneficial to the bottom line if they participate in such activities under the auspices of social responsibility. If Wal-Mart has a reputation of intolerance, that creates a barrier of entry into the urban markets. So while they participate in socially responsible causes, they do it to maximize shareholder value.

    Comment by Kevin — November 22, 2006 @ 3:15 pm

  5. #4, I don’t necessarily disagree with that, but the only reason that’s a possibility is that some of the public has been brainwashed about the company’s alleged intolerance (if you want to believe the worst, they’re equal opportunity “slavedrivers”). The rich elites spout the nonsense, but the people who would benefit not only want the stores, but want to work at the stores.

    The solution for some is to do what George Soros recommends, which is to pretend to be socially responsible:

    http://www.bizzyblog.com/2006/11/09/comment-not-required/

    If Wal-Mart is also deciding to stop playing Soros’s recommended game of charades, well good for them.

    Comment by TBlumer — November 22, 2006 @ 4:06 pm

  6. The problem that I have with Wal-Mart is their buying power. Wholesalers must give steep discounts to WMT in order to attract its business. The residual effects of these discounts lead to lower profits for the wholesalers.

    Soros is right about pretending to be socially responsible, though I prefer “auspices” to be a little more user friendly. This is not a new concept. Corporations donate money for charitable causes and foundations for arts not for social utility, but for advertisement.

    Comment by Kevin — November 22, 2006 @ 4:27 pm

  7. Oh, there are reasons to be troubled by Wal-Mart, don’t get me wrong. To the extent that they do what a certain hardware chain with orange in its color scheme does, which is force American companies to contract out to China or lose business (even when the imported cost has to be higher with shipping), shame on them. To the extent that they lowball suppliers out of business (the car cos do that too), shame on them.

    To the extent that corps support charitable causes for advertising purposes, it verges on the defensible. I have always wondered why such expenditures shouldn’t require stockholder approval, though, since charitable giving is outside the scope of why they invested.

    Comment by TBlumer — November 22, 2006 @ 5:02 pm

  8. Economics and Social Policy XXII…

    The Milton Friedman retrospective edition is up. Thanks for your submission….

    Trackback by The Boring Made Dull — November 26, 2006 @ 9:28 pm

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.