Inside This Issue - Opinion
PR is not retailing’s strong suit
September 3rd, 2012
by David Pinto, Editor
A recent New York Times headline ran as follows: “Sales at Wal-Mart, Though Still Rising, Suggest Wary Shoppers.” The story that followed detailed Walmart’s quarterly results: a comp-store sales gain of 2.2%, a total sales increase of 4.5% to $114.3 billion, and earnings of $4.02 billion.
The article included the results other retailers posted as well — Target, Home Depot, Macy’s. But the slant of the article was determined not by the writer but rather by a comment by Charles Holley Jr., Walmart’s chief financial officer, who told reporters via a conference call that "I don’t think the economy’s helping us," adding, "If anything, our consumer’s probably being a little more stretched because of gas prices."
It’s no surprise that consumer journalists aren’t as fully informed about retailing as they might be. Still, two facts emerge from this story. The first is that Walmart enjoyed an acceptable quarter, especially when viewed against a still-sluggish economy. As the Times article points out, store traffic at Walmart increased by 0.4% in the quarter, an increase that translated to 80,000 more shoppers a day at the nation’s largest retailer.
Second, in light of this acceptable performance, why would a Walmart executive denigrate it by telling reporters that the economy is not helping? Perhaps that’s so; perhaps not. But why dwell on it? Contrast those remarks to a statement made by Target chief executive officer Gregg Steinhafel about his company’s 3.1% same-store sales increase for the quarter: "We believe our guests will continue to be both cautious and resilient, shopping and spending at Target in disciplined ways." Those are pretty much the same sentiments; they’re simply expressed with more confidence about the future.
But back to the Times article. Its tone — picked up more perhaps from the quoted comments of various retail executives than from the actual results, which were not all that bad — was largely negative. Suppose the headline that reflected the tone of the story had been reversed to read this way: “Despite Wary Shoppers, Sales at Walmart Still Rising.” That’s no less accurate than the way the Times positioned the story. But it’s far more positive — and a far more accurate reflection of the results retailers are turning in amid a difficult economic environment.
Retailing, as does all business, needs a press that is supportive rather than skeptical. But public relations is not retailing’s strong suit. Supermarket operators still insist on maintaining an adversarial relationship with the consumer press, and the very best grocery retailers in America — H-E-B, Publix, Wegmans — make every effort to stay out of public print.
Target has only recently become productively proactive where the press is concerned — a reversal due in no small part to the recent hiring of an experienced, enlightened and engaging woman to head the retailer’s PR department. Among major drug chains, Walgreens is the retailer that most aggressively pursues positive stories, a pursuit that gained the company an enormously favorable reception from the consumer press after the unveiling of its flagship store at 40 Wall St. a year ago.
Then there’s Walmart. Few U.S. companies have a stronger story to tell. Despite some bumps in the road — a few of them serious — this company continues to turn in results that defy all logic. More consumers shop Walmart today than ever have — and the addition of 80,000 shoppers a day during the most recent quarter is just further proof that, sluggish economy or not, American consumers still trust this retailer.
Yet a substantial portion of the Times story dwelt on Walmart’s current Mexican troubles. Indeed, the newspaper went so far as to tell its readers that “the company spent $34 million in the quarter on expenses related to outside advisers on issues related to the Foreign Corrupt Practices Act….” Remember, this is a story about retailer performance in the most recent fiscal period. Yet five paragraphs were devoted to Walmart’s Mexican situation. And $34 million at a half-trillion-dollar company. Is that too little? Enough? Too much?
The point in all this is obvious: Walmart needs to do a better job of telling its story — and laying out its considerable accomplishments — in a positive way. The company employs a larger internal public relations staff than any retailer in the country. Yet stories continue to regularly appear to the effect that Walmart gleefully puts competitors out of business — despite the fact that this issue, an absurd fiction, has long since been put to rest.
As for much of America’s consumer press, a cram course in Retailing 101 might well be in order.