Wal-Mart's New Marketing Strategy Hides Dirty Practices

By Jim Hightower, Hightower Lowdown. Posted January 30, 2007.

You know that our world has turned totally topsy-turvy when Wal-Mart -- the low-price, bare-knuckle retailing behemoth known far and wide as the Bully of Bentonville for its ruthless corporate practices -- is suddenly putting on airs and positioning itself as (dare I say it?) metrosexual.

Yes, the world's largest and meanest merchandiser -- stung in the last few years by a grassroots rebellion of employees, small businesses, unions, neighborhood groups, environmentalists, and others that it has been so arrogantly stiffing -- is now straining to project a kinder and gentler image: urbane, upscale, green, socially responsible … even sensitive, for goodness sake. The image spiff-up comes as Wal-Mart executives have made a marketing decision to move from their suburban/rural base into cities, reaching out to a clientele that wants finer goods … and a more refined company.

But has the beast really changed? Inside the stores, and you can see a Nouveau Wal-Martique emerging. To appeal to more affluent customers (this advanced Wally-World calls them "selective shoppers"), Wal-Mart is upgrading its merchandise to include $500 bottles of wine, organic foods, $2,000 plasma TVs, 400-thread-count sheets, imported balsamic vinegar, organic-cotton baby clothes, microbrewed beers, and a new "Metro 7" line of designer fashions. Never mind that the average Wal-Mart shopper lives in the suburbs, is female, stands 5-foot-2, wears a size 14, and is looking for sensible skirts and durable go-to-work clothing -- the reinvented retailing giant is proffering skinny-legged, fur-trimmed jeans for the stylish set. It has even run an 8-page fashion spread in Vogue magazine.

Last March, this high-toned Wal-Martique opened a model store in the well-to-do corporate haven of Plano, Texas. No downscale blue-and-gray, concrete-block facade for this baby. It features two tone brick walls, wood floors, wide aisles, uncluttered shelves with cherry finish, halogen lights, and discrete fitting rooms for a hoity toity clientele. Also, forget the usual in-store McDonald's. There's an espresso bar with free wi-fi and -- Holy Sam Walton! -- a sushi bar to enhance what cosmopolitan retail consultants call "the shopping experience."

In addition, you might note what's not there. No more layaway plans, for example. No shotguns and hunting gear, either. Also, far less in the way of automotive tools and supplies. As the model store's project manager explains, "This customer is telling us they're not doing it themselves. They don't change their own oil."

Eliza Doolittles

Naturally, an upwardly mobile Wal-Mart cannot have its workers -- excuse me, "associates," as they are called in Wal-Martspeak -- garbed in those dowdy blue vests with "How May I Help You?" emblazoned on the back. Too, too tacky. When a corporate fashion designer was brought in, he took one look at Sam Walton's friendly vests and termed them "the lowest guppy in the pool" of retail outfits.

So Wal-Mart is giving a makeover not only to 1,800 stores, but also to clerks. A new dress code dictates a positively preppy look of khaki pants and navy-blue polo shirts, giving the place a feel described by the fashion designer as "much more business casual than working class." Yes, but should workers tuck their polos into their khakis for a sharp, snappy appearance, or leave the shirts untucked as a sign of an easygoing, fun-loving workplace? Believe it or not, the tucking question reached the top levels of HQ in Bentonville. Finally, the word came down from on high: "If they want to tuck it in they can. If not, they can leave it out."

And you thought there was no workplace democracy at Wal-Mart!

Workers, however, are less than charmed by the change in couture, for the company expects them to dig into their own pockets to buy the preppy uniforms. Perhaps these employees will find solace in the assertion by the fashion designer that the new duds "will raise the status of the 1.3 million Americans" who work there. It's entirely possible, of course, that workers would prefer to trade "status" for the genuine elevation that comes from higher paychecks and better treatment.

Beneath Wal-Mart's new cosmetic sheen lies the same old ugliness. The average employee toils for $8.23 an hour -- a poverty-level wage that amounts to about $16,700 a year gross (in both meanings of that word). Many don't even make that, for Wal-Mart defines "fulltime" work as 36 hours a week rather than the usual 40. It's common for bosses to hold workers to under 24 hours a week, which reduces gross annual income to only about $10,000.

Contrast this miserliness with the company's lavishing of wealth on those at the top. CEO H. Lee Scott, Jr., had a base salary of $1.3 million in 2005, plus $4 million in "incentive" payments, as well as stock and other compensation that raised his total haul to $17.5 million (including more than $100,000 for personal use of corporate jets). Also, Wal-Mart founder Sam Walton's widow and their four children, who collectively hold 40 percent of the corporation's stock, are living grandly. At present, they are sitting on personal nest-eggs of $15.5 billion each, putting all five of them among America's 11 richest people.

Meanwhile, fewer than half of Wal-Mart's employees get any healthcare benefits at all -- and those who do must pay 41 percent of the cost for a lousy plan that carries a $3,000 deductible per family plus a $300 pharmacy deductible and a $1,000 in-patient hospital deductible. Honchos at headquarters keep insisting that the health benefits they offer are "competitive" with other retailers. But look no further than Costco, where a good plan covers 80 percent of employees and the company pays 90 percent of the premiums.

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From "The Hightower Lowdown," edited by Jim Hightower and Phillip Frazer, January 2007. Jim Hightower is a national radio commentator, writer, public speaker, and author of "Thieves In High Places: They've Stolen Our Country And It's Time to Take It Back."

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