Wal-Mart puts itself in the game

Retailer publicly taking lead in some hot-button issues

During an interview with Maria Bartiromo on Fox Business Network, Wal-Mart CEO Doug McMillon answers questions Tuesday about the retailer no longer selling Confederate-themed items.
During an interview with Maria Bartiromo on Fox Business Network, Wal-Mart CEO Doug McMillon answers questions Tuesday about the retailer no longer selling Confederate-themed items.

Corporations tend to make many of their political moves behind the scenes. They often shy away from public displays of support for one cause or another to avoid alienating customers.

Over the past six months, however, Wal-Mart Stores Inc. has publicly announced its position on several political or social issues that have been hotly debated.

"There's a certain sense in which companies don't want to make news. That's often the attitude," said Tim Feddersen, professor of managerial economics and decision sciences at Northwestern's Kellogg School of Management. "Wal-Mart has been making news, which, that part of it is unusual. It seems like they're doing things that are consistent with being a leader. They recognize the role they can play."

Since January, the world's largest retailer has announced its intention to pull Confederate-themed merchandise from its stores and online offerings, and publicly opposed a measure in Arkansas that some feared would lead to discrimination against the lesbian, gay, bisexual and transgender (LGBT) community.

And, on June 18, Wal-Mart CEO Doug McMillon released a statement showing support for the U.S. House vote to pass the "Trade Promotion Authority" bill, which includes a much-debated trade agreement with Pacific Rim countries.

Also, although it didn't take a public stand on the federal minimum wage issue, the company increased the minimum wage and overall pay structure for its store employees.

The fact that Wal-Mart has avoided taking sides on some issues, like the federal minimum wage, is a sign that it is wisely picking its battles, according to Bill Vickery, a longtime conservative political strategist and president of Little Rock-based Capitol Advisors Group.

"There will be no shortage of battles for a corporation to be lured into," Vickery said. "There always has to be an eye toward the business unit working hand in glove with the political unit. In my mind, they've made some really wise decisions about mixing business and politics together. That's why they've continued to grow."

Wal-Mart announced Monday that it would stop selling Confederate-themed merchandise online and in stores. The decision came in the wake of nine black people being gunned down inside a church in Charleston, S.C. Dylann Storm Roof is charged in those killings. Roof is pictured online with a Confederate flag and other symbols used by white supremacists.

A day later, other major retailers -- including Sears and eBay -- announced plans to no longer sell Confederate-themed merchandise.

Founded in the South, there was a chance that Wal-Mart's core customers would be offended by the decision to pull the Confederate-themed merchandise, Vickery said.

When some high-profile Republican politicians began speaking out about the Confederate battle flag flying on the state Capitol grounds in Charleston, that gave the retailer what Vickery described as "enough political cover" to make the decision to pull the merchandise. At that point the retailer was weighing the cost of inaction against the cost of action, he said.

Even if there were customers upset over the decisions regarding the Confederate flag or civil-rights-related issues, Wal-Mart had to weigh the good that could come from taking a stand on them, said David Lublin, professor of public affairs at American University in Washington, D.C.

Lublin, author of The Republican South: Democratization and Partisan Change, said the retailer, or any company in its position, doesn't have to take the lead on social issues, but can't be caught flat-footed as public sentiment changes, he said. That sometimes means taking action that might be viewed as politically partisan.

"Wal-Mart isn't becoming your gay pride store, but extending same-sex benefits helps recruit and reattain gay employees without hurting your straight employees at all. It makes good sense," Lublin said. "They don't need to be the leader. They just don't need to be left behind. They don't want to be seen as a Republican store or Democratic store. They want to be seen as a great American store."

Its actions over the past six months indicate that Wal-Mart is getting more comfortable taking a leadership role on social issues, Feddersen said.

Its willingness to take public stands seems to have changed as the company shifts its focus for growth, he added. In its early days, Wal-Mart focused much of its expansion efforts in rural and suburban areas, but years ago it turned its attention to more urban areas and other previously untapped markets. It is also pursuing younger, more socially conscious shoppers who do a lot of their shopping online.

Because of Wal-Mart's size and scale, its decisions can have ripple effects among other retailers and corporations. Wal-Mart's influence became evident earlier this year when it announced pay raises for hourly employees and store managers. Other retail and fast-food employers followed suit with their own wage increases.

In March, after state lawmakers had passed the "Religious Freedom Restoration Act," Wal-Mart issued a news release urging Gov. Asa Hutchinson to revise the measure. In it, the company said, "We clearly support the importance of religious freedom and encourage the legislature to make certain any legislation does not encourage discrimination."

Wal-Mart was ranked by the Human Rights Campaign Foundation last year as one of the top Fortune 500 companies for its treatment of LGBT workers.

Hutchinson ultimately called for a revision of the bill so that it more closely followed federal law.

Little Rock political strategist Stacy Sells noted that Wal-Mart appears to have some "progressive leadership" making decisions. Sells, a self-described "progressive," first noticed the changes when Wal-Mart announced in 2013 that it would extend benefits to same-sex couples beginning in 2014.

"Look, they're headquartered in Arkansas. Same-sex benefits are an issue that progressives like me haven't been able to make happen in Arkansas," Sells said. "They've taken a position there. Because of their size, they're powerful and influential. We've seen that just over the past week."

Wal-Mart wants to do more than run good stores and earn money, McMillon told shareholders earlier this month. When the retailer decided to stop selling Confederate-themed merchandise, he reiterated his desire for the company to "influence the way business works" and "do good in the world."

"We need to always remember we're a retailer. We're a merchant. That's our business," McMillon said Tuesday on Bloomberg TV. "We do look for places to make a positive difference in the world. There is such a thing as a double-bottom line."

SundayMonday Business on 06/28/2015

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