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PR firm campaigns for winning Wal-Mart image

Over the past year, Lee Scott has appeared on the Rev. Al Sharpton's radio show, talked about pro-environment policies and given speeches that repeatedly state his organization's devotion to "working families."

If Scott, the chief executive of Wal-Mart Stores Inc., seems like he's running for office, it's no accident. For the past 15 months, the Edelman public relations firm, led by seasoned political operatives, has been directing a campaign it calls "Candidate Wal-Mart." The goal: Rescue the battered image of the world's largest retailer.

Edelman's bipartisan team has been behind the curtain during Wal-Mart's most visible recent initiatives - and some of its public stumbles. When Wal-Mart decided to sell an array of generic drugs for $4 a prescription, Edelman orchestrated a 49-state rollout, lining up local dignitaries in 79 places for publicity events. The PR giant also organized a grass roots group called Working Families for Wal-Mart. But it had to scramble when the leader it helped recruit, Andrew Young, made derogatory comments about ethnic shopkeepers and was forced to resign.

Wal-Mart badly needs a boost. Its sales growth has waned in recent years and an effort to reach out to higher-earning shoppers has sputtered, partly because of the company's beleaguered image.

As Edelman and Wal-Mart see it, image is crucial for drawing customers, smoothing the way for new stores in urban areas and beating back legislation that would raise costs.

Leslie Dach, a former adviser to Democratic politicians, led the campaign's first year as an Edelman vice chairman. Now Dach is a Wal-Marter in full: In July, the retailer hired him as an executive vice president for communications and government relations, reporting directly to Scott.

For years, Wal-Mart did little to promote itself as a positive social force, believing its low prices would speak for themselves. But as it mushroomed to become one of the world's biggest companies - with 6,700 stores and $312-billion in sales last year - it increasingly felt the sting of public criticism and pressure to fight back.

Katrina response

The pressure grew last year when unions started two organizations to hammer Wal-Mart: the Service Employees International Union's Wal-Mart Watch and, funded by the United Food and Commercial Workers union.

Soon after getting hired by Wal-Mart, Edelman found an opening. In the wake of Hurricane Katrina, Wal-Mart rushed to reopen its stores and speed supplies to the storm-damaged areas.

After the storm, evacuees and local officials proclaimed in the news that Wal-Mart had outhustled the federal government. Also, Wal-Mart quickly made a $15-million donation to the hurricane-relief fund organized by former Presidents Clinton and Bush. The two ex-presidents praised Wal-Mart's generosity.

Another early Edelman initiative was Working Families for Wal-Mart, the grass roots organization. The idea was to allow Wal-Mart's defenders to strike back against critics without requiring the company's own PR staff to enter the fray. Wal-Mart provided the group's funding and Edelman staffed it.

Yet the Working Families group has produced some of Edelman's worst fumbles, too. In October, bloggers and mainstream media criticized Working Families for Wal-Mart for not disclosing the full identities of two people - one the sister of an Edelman executive - whom it enlisted to write a pro-company blog.


Ad agency dumped

Wal-Mart Stores Inc. has dropped its newly hired ad agency, Interpublic Group of Cos.' DraftFCB, following the departure of a top marketing executive who helped lead Wal-Mart's switch to the new agency. Wal-Mart spokeswoman Mona Williams said that the decision was "the result of new information that we have obtained over the past few weeks." She said Wal-Mart is reopening the bid process for its advertising account, which is worth more than a half-billion dollars.