LOS ANGELES — Wal-Mart chief executive officer H. Lee Scott admitted Wednesday the company had made a mistake in its failed efforts to build a supercenter in Inglewood, Calif., but it’s still pushing ahead with plans to open up to 25 stores in the state this year.
“We went through a process [in Inglewood] that didn’t go through city hall,” said Scott, speaking in a conservative slate blue suit and light blue tie. “And as a big company that came across as arrogant and it didn’t go over very well.”
Wal-Mart, which has encountered resistance to its expansion plans in New York, Chicago and other locales, has come under attack from organized labor, and Scott conceded at a retail conference last year that management had failed in getting out the company’s message. Scott’s appearance Wednesday was part of an effort, including a national advertising campaign, to rectify those mistakes, and marks the first of several appearances this year in key cities around the U.S., including Los Angeles and Chicago.
Scott said the company plans to open 25 more stores in California in 2005, including one in Los Angeles. But the one being built in L.A. will not be a superstore, while some of the others will be.
“We’re more fortunate to get stores in the Valley than in L.A.,” Scott said. “But supercenters will do well here and the battle will go on long after I’m gone, because people here need it.”
Voters in Inglewood, a working class suburb of Los Angeles, weren’t so sure that they needed a Wal-Mart in their neighborhood, and voted last April to reject a ballot initiative that would have allowed construction of a 60-acre Wal-Mart shopping center exempt from most state and local regulations. A coalition of churches, unions and community groups said the development would have hurt small retailers and taken away the city’s legal, environmental and planning powers.
Despite the controversy, Scott said California was a very favorable place for the company to do business and to expand, calling it “a great state in spite of itself.” But he said the retailer would only reapproach Inglewood if he was positive it would be approved.
This story first appeared in the February 24, 2005 issue of WWD. Subscribe Today.
Said Scott, “I feel sorry for Inglewood. Today there’s nothing there creating economic value or better prices for the people.”
Scott also addressed the issue of wages and health benefits numerous times, as the company has come under increasing scrutiny for child-labor violations, the largest-ever workplace discrimination lawsuit and allegations that it depresses wages and provides inadequate employee benefits.
“Wal-Mart is nothing remotely like the horror story out of Dickens that our critics are peddling,” said Scott. “It is true, however…that retailing generally pays lower frontline wages than other industries that require more specialized education or skills.”
Scott, who was clearly on a mission, charmed the audience of mostly business executives, who often clapped and laughed with him, many nodding in agreement when he said he’s been “shocked” by the intense criticism of the company. Scott also displayed an uncanny ability to recall the many critics who have approached him at meetings such as this — including, once, a nun.
“The failure of people like me to come to people like you has allowed our critics to bamboozle the people and the press.”
In an effort to set the record straight, he said the company creates jobs that many small entities could not provide, adding that the average wage is $10 an hour and that the company offers low monthly premiums for health insurance and other benefits such as a 401(k) plan, merchandise discounts, performance bonuses and more.
“If Wal-Mart weren’t an attractive place to work, we wouldn’t find ourselves, as we typically do, with thousands of applications for the hundreds of jobs we create when we open a new store,” Scott said.
Most importantly, pointed out Scott, the people have spoken in favor of Wal-Mart. “Even if you could stop Wal-Mart, other value retailers will fill the void,” he said. “You cannot pass enough laws or regulations to stop consumers from expecting, even demanding, value.”