Wal-Mart has taken its share of punches from critics on issues such as employee salaries and benefits, as well as accusations that it’s responsible for pushing long-standing mom-and-pop stores out of business.
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In a rare interview with Neil Cavuto March 24 on Fox News’ "Your World," Wal-Mart CEO Lee Scott defended the world’s largest retailer’s impact on the U.S. and the world and took the opportunity to explain his position on several allegations that critics have heaped on the Bentonville-Ark.-based company.
Scott said he is not concerned when Democrat-presidential candidates like Hillary Clinton who once served on the Wal-Mart board, or Barack Obama and John Edwards criticize Wal-Mart.
Noting that he has "tremendous respect” for Clinton, Scott explained, "If you spend time speaking with our customers and associates, you get a better perspective of what we are. It emboldens us and encourages us to go on.”
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He added that, "It’s politics. People are catering to the special interests they believe will provide impetus for them to get the (presidential) nomination. Over the long term, if you think of the 127 million shoppers in Wal-Mart stores every week, our customers and associates see through the politics.
"Our results show it has almost no impact on our customers,” he continued. "They judge us on how they see our associates – they’re friendly, happy, say thank you. Customers pay attention to prices and whether we have items in stock. Do I think the criticism resonates a little bit on what the company’s doing? It’s probably true, but our customers value this company based on their store and their community, and that’s the relationship they have. That’s the reason the criticism hasn’t had the impact the critics would like.”
Scott resisted Cavuto’s attempt to pull him into a discussion of his personal politics including trying to learn who he intends to vote for in the presidential election.
"I’ve supported both Republicans and Democrats. My politics aren’t relevant here,” he said addressing Cavuto's inquiry into whether he was "more of a red guy (Republican) than blue guy (Democrat)."
Cavuto wanted to know why Wal-Mart doesn’t do more to hype how it saves its customers nearly an estimated $2,000 a year. Scott explained that he wasn’t sure that it’s news worthy that Wal-Mart provides job opportunities, that it saves customers money, and that the company has a policy of promoting from within.
"I guess it’s what we’re expected to do,” he stated, adding, "Our workers get very upset with the company being attacked because they work in the store and know how they’re treated and where they were working before.”
Scott agreed with Cavuto that the criticism would cease if Wal-Mart was unionized. But he emphasized that the issues being cited by critics "came from the unions after we started the super center program and entered into groceries. That’s where the major force behind the criticism comes from. We can’t appease them.
"It’s about politics and power,” he added, "not workers.”
Wal-Mart employs 1.8 million people worldwide; 1.3 million of whom are in the U.S.
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Scott also defended Wal-Mart against the charges that it’s put mom-and-pop stores out of business because they couldn’t compete with the large retailer.
"Look at where we build stores and the economic activity around them, the growth and development. I wouldn’t argue there’s someone who’s disadvantaged and goes out of business, but we see overall there’s more economic activity and small businesses do very well,” said Scott.
Cavuto also took a few minutes to discuss Scott’s thoughts on the "Terror Ad” that’s been broadcast on television that accuses Wal-Mart of being more concerned with profits than with America’s security.
Scott didn’t mince words when he responded that the ad, "Smacks of desperation, it’s bad taste. Our customers don’t believe that kind of idiocy.”
When Cavuto changed the subject to the national economy and inflation, Scott said he was "cautious” on the economy and concurred that the inflation rate in the U.S. would be "significantly” higher without Wal-Mart.
"If you want society to continue to grow and evolve then I think rewarding efficiencies and having consumers get the benefit of efficiencies makes all the sense in the world. The idea of discount retailing is wonderful for the U.S.”
Scott continued to explain that Wal-Mart was well aware of the impact of the rising cost of fuel on customers.
"Rising fuel prices have an impact on everything. Many of our customers are living pay check to pay check. Any time they have to put more money into their trucks means they have less money to spend at Wal-Mart,” he explained.
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Scott also responded to Cavuto’s question concerning the company’s decision to withdraw its application for an industrial loan charter.
Noting that "you can’t exit someplace you haven’t been,” Scott explained that Wal-Mart intended to use the charter to do back room processing. However, he said, "It became very controversial and political, and it became clear we weren’t able to do that. So we withdrew the application for that charter, and now we’re looking at how we can get another bite of that apple.”
According to Scott, 20 percent of Wal-Mart’s customers don’t have checking accounts.
"Our customers are underserved in many ways. How can we serve those people? We’re going to take another look at this, it’s not a dead issue,” he added.
Lastly, Scott took the time to discuss Wal-Mart’s attitude of giving back to the community through charitable donations, noting that it’s a philosophy that was started by Wal-Mart founder Sam Walton. He pointed out that the company made nearly $300 million in charitable gifts in 2006 to communities "because it’s the right thing to do.”
Wal-Mart is also focused on "green” initiatives and eliminating waste.
"The geo-political issues we’re facing today have a big impact on this country and the citizens of many countries…It’s the right thing to do. I apologize if somebody’s so conservative that they hate the fact that it’s going to be good for the environment,” Scott said.
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