the audit

Little Stories About a Big Company: Wal-Mart

November 18, 2005

Mega-retailer Wal-Mart has received a lot of press lately — and so it should. What makes better copy than stories about a ubiquitous behemoth that has the power to move the economies of entire nations and has come to symbolize all that is both right and wrong with globalization and the modern economy?

Acting as a counterweight to this, as we’ve seen before, journalists often have the habit of reducing complex stories to easily digested morsels of information, and scribblers of the Wal-Mart tale are no exception. Only the Los Angeles Times, which won a Pulitzer for a 2004 series on the company, has attempted to present a comprehensive, inside account of the way Wal-Mart conducts business.

Most of the coverage of late has focused on the recent leak of an internal company memo that, according to the New York Times (which got the initial scoop), “proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer’s reputation. Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart.”

This led to the usual outcries against the machinations of heartless corporate giants, and conversely, the defense of Wal-Mart’s policies by proponents of a more laissez faire approach to business. But the New York Times‘ interesting tidbit failed to translate into a truly comprehensive story — either in the Times or elsewhere.

Newsweek joined the scrum this week with a story focusing on Wal-Mart’s public relations efforts in the aftermath the memo and a recent negative documentary about the company. To the magazine’s credit, it offered a competently written story that effectively presents various points of view.

What’s it doesn’t do, though, is give us much in the way of new information, or an idea of how Wal-Mart actually works. We are not introduced to the executives who make the decisions that cause so much controversy. And we learn very little about the backgrounds or nature of the people and organizations that campaign against Wal-Mart’s activities.

Sign up for CJR's daily email

Moreover, Newsweek provides a simplified and unhelpful analysis of the all-important numbers behind Wal-Mart’s business. For example, the story noted that the company’s stock price has fallen over the past two years, a fact that it ascribes almost wholly to Wal-Mart’s bad PR and fears of related litigation.

That theory is convenient enough, given that the story’s focus is on public relations. But surely the reasons for a low stock price are more complicated. After all, rival retailers, including Target and JC Penny have also seen their share prices slide. And as Jay Kaeppel of Optionetics.com wrote late last month, “Wal-Mart has matured and grown investors have come to realize that the type of growth that the company experienced in the 1980s and 1990s is not going to continue at the same pace. As a result, what has seemingly been marked down the most is not the everyday low prices of the goods they sell, but the price/earnings ratio for the stock itself.”

But not everybody is out to get Wal-Mart. A great example of a pro-Wal-Mart piece that still manages to simplify the difficulties the company faces is a piece in the latest issue of Fortune. Writer Geoffrey Colvin, with a flourish and a snarl, reduces much of the criticism of the company to “the emergence of a friction-free global economy.” He writes that the criticism is little more than the wailing of people who don’t appreciate “being wrenched from the old world into the new.”

Colvin’s defense of “the new,” specifically his desire to explain away Wal-Mart’s corporate and health care policies as being nothing more than the result of the increased competition of globalization, comes off as a markedly more dour version of the militantly pro-globalization New York Times columnist Thomas Friedman. Of the fact that the company offers a pretty lame health care package, Colvin writes, “Again, welcome to 2005. Everybody’s medical coverage is getting stingier because in a global economy, where U.S. workers compete with those in Datang and Wal-Mart competes for capital with every other business on earth, American companies can’t continue paying the world’s highest health-care costs. Don’t blame Wal-Mart; blame America’s inability to devise a national health plan that takes the burden off employers.”

Colvin’s got a point, but he’s overstating the reality of the global marketplace. Wal-Mart employees aren’t competing with workers in Datang, because the company’s people work in retail stores in the United States. Outsourcing is a hot-button issue these days, but the one job that can’t be outsourced is the person manning the cash register or stocking the shelves at your local Wal-Mart.

There are doubtless many reasons Wal-Mart hasn’t offered its employees a satisfactory benefits package, but life in Datang is not likely to be one of them. What are those reasons? We don’t know, because most journalists tackle the story of America’s largest company with all the gusto of reporters assigned to cover the local PTA. And those who do get fired up about Wal-Mart skip over the complex facts lest they interfere with the flow of their easily digestible and one-dimensional narratives.

Paul McLeary is a former CJR staff writer. Since 2008, he has covered the Pentagon for Foreign Policy, Defense News, Breaking Defense, and other outlets. He is currently a defense reporter for Politico.