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Branding Strategy: The Big Apple
Not Above Naming Wal-Mart Persona Non Grata.

You can call this company names. Something that comes easily for New Yorkers.

H.Lee Scott Jr., CEO of Wal-Mart is not a man who is used to throwing in the towel. True, he did give up in Germany, where Wal-Mart learned hard lessons
like German shoppers do not want clerks smiling at them.But this branding battle is much closer to home. Wal-Mart, which has almost 4,000 stores in the U.S. and a languishing stock price, has been having a tough time finding big city locations to fuel its appetite for growth. In December, 2006 Wal-Mart teamed up with a developer and announced plans for its first New York store, and virtually overnight a coalition of protest groups--labor unions, green activists, neighborhood groups and mom and pop stores--were manning the barricades. Said one New York union official, “We don’t like how they do business.” Even Mayor Bloomberg backtracked on earlier statements of support for big box retailers..

“I’ve got a name for Wal-Mart,” Says A Neighborhood Group Strategist

“Wal-Mart is like the Death Star,” according to Richard Lipsky, the head of New York’s Neighborhood Retail Alliance. “You can wipe them out, but they’ll be back.” So it’s a little hard to know how to interpret the CEO’s comments at a press briefing, where he said, “I don’t think it’s worth the effort--in fact, I don’t care if we are ever here.” Lee told a reporter in a different briefing that he felt like he was being “nibbled to death by guppies.” However, with 1.6 million employees paid an average of $9.68 an hour, some of his irritation is probably coming from a different quarter. Many communities fighting Wal-Mart have made the case that their “everyday low prices” leave most of their workers living below the poverty line.

Branding Can’t Make These Problems Go Away

Wal-Mart is fighting dozens of lawsuits that allege managers forced workers to work off the clock. They’ve been sued for locking illegal immigrant cleaning crews in their stores at night. They have racked up big fines for violating child labor laws. And they are dealing with the biggest class-action lawsuit ever that charges sex discrimination against 1.6 million current and former women employees. And, in other news, 57% of their employees apparently don’t have health insurance. In 18 out of 19 states that report this data, Wal-Mart holds the dubious distinction of holding the number one position for the number of workers and family members on public health care assistance. One estimate puts the cost to American taxpayers at $9 billion over the next five years. With Wal-Mart outperforming FEMA after Hurricane Katrina and making major efforts to shrink its environmental footprint, how does all this add up? How do you tell the good Wal-Mart from the bad Wal-Mart? And what is all this doing to their brand?