The Bad Boys of Business: Wal-Mart

Approximately 100 million customers shop America’s Wal-Mart (WMT) stores each week -- that’s about a third of the entire population of the United States. This translated into revenue last year of $404 billion. But there are dozens of special-interest groups that would like nothing more than to see Wal-Mart go away.

Right or wrong, what’s a company to do?

Never underestimate the power of PR.

A few years ago, then-CEO Lee Scott appeared on the Charlie Rose show to discuss Wal-Mart’s new environmental bent. Energy-saving compact fluorescent light bulbs. Trucks that run on cooking oil. Green packaging. After a period of time, the results spoke for themselves. The PR push worked.

Take a look at what BusinessWeek had to say:

“Wal-Mart might well be both America’s most admired and most hated company. But the more size and power that 'the Beast of Bentonville' amasses, the greater the backlash it is stirring among competing retailers, vendors, organized labor, community activists, and cultural and political progressives.

"America has a long history of controversial retailers, notes James E. Hoopes, a history professor at Babson College. 'What's new about Wal-Mart is the flak it's drawn from outside the world of its competition,' he says. 'It's become a social phenomenon that people resent and fear.' "

Why the fear and resentment?

As the BusinessWeek article explained:

“Wal-Mart controls a large and rapidly increasing share of the business done by most every major US consumer-products company: 28% of Dial (DL) total sales, 24% of Del Monte Foods' (DLM), 23% of Clorox' (CLX), 23% of Revlon's (REV), and on down the list.

"Suppliers' growing dependence on Wal-Mart is 'a huge issue' not only for manufacturers but also for the US economy, says Tom Rubel, CEO of consultant Retail Forward Inc. 'If [Wal-Mart] ever stumbles, we've got a potential national security problem on our hands. They touch almost everything...If they ever really went into a tailspin, the dislocation would be significant and traumatic.' "