Chains Hire ‘Wal-Mart Killers’ on the Sly

Discussion
Jun 08, 2010
George Anderson

By George Anderson

It’s not unusual for businesses to quietly bankroll individuals
or organizations that advance causes supporting their corporate goals. One
such organization, Saint Consulting Group, has found willing clients in companies
like Ahold, Safeway and Supervalu. Saint Consulting, according to a Wall
Street Journal
report,
is in the business of trying to keep Wal-Mart from opening stores.

While groups
such as labor unions usually top media depictions of opposition to the world’s
largest retailer, Saint Consulting takes pride in being a company of "Wal-Mart
killers."

In many cases, the goal is not to prevent new stores from being
built but delay them and drive up the cost for Wal-Mart. In one example cited
in the Journal report,
roadblocks thrown up by Saint on behalf of Supervalu resulted in it taking
three years for Wal-Mart to open one of its Supercenters in a suburb of Chicago.

Saint
typically sends in one of its managers under an assumed name to an area to
flood local politicians with calls of protest. The firm hires lawyers and a
variety of experts to challenge aspects of the project with the hopes that
Wal-Mart or the developer will look for a new location to build.

In some instances,
labor unions work with chains to fight Wal-Mart together. "The
work we’ve funded Saint to do to preserve our market share and our jobs is
within our First Amendment rights," Jill Cashen, a spokesperson for the
United Food and Commercial Workers (UFCW), told the Journal. The UFCW
has joined with Safeway to contest over 30 proposed Wal-Mart Supercenters on
the West Coast and Hawaii.

Discussion Questions: Do you see any ethical issues with chains secretly
bankrolling companies such as Saint Consulting to influence public policy
such as zoning decisions? How do you think customers
of these chains would react if they understood the tactics being used against
Wal-Mart?

Please practice The RetailWire Golden Rule when submitting your comments.

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30 Comments on "Chains Hire ‘Wal-Mart Killers’ on the Sly"


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Paula Rosenblum
Guest
10 years 11 months ago

Of COURSE both sides should provide full disclosure, but I don’t see that happening on EITHER side at the moment. Watched political commercials funded by strangely named organizations lately? I was fascinated by the anti-healthcare reform commercials supported by some strangely named Seniors group (I think the tag line was “Haven’t we suffered enough?” or something like that). And of course…Tea Party, anyone?

Isn’t turnabout fair play? We have lobbying associations that seek to influence government decisions in favor of big retailers, small retailers, unions, oil companies, you name it. Why is it wrong to have those who seek to oppose them also get organized?

Bob Phibbs
Guest
10 years 11 months ago

A poster child for what is wrong with unions. Instead of our members doing a better job, we want to prevent others from getting theirs. Amazing.

Warren Thayer
Guest
10 years 11 months ago

If the shoe were on the other foot, and Walmart was doing this against other retailers, the outraged protests and calls for boycotts and Congressional inquiries would be all over the news, and it wouldn’t even be a question posed here or anywhere else.

Roger Saunders
Guest
10 years 11 months ago
A great many ‘fine lines’ can be crossed in inappropriate and illegal ways in these zoning issues. Tough to regulate INTEGRITY–are local politicians being or asking to be ‘paid to play’, have unions overstepped bounds in making use of their membership funds, have competitors deliberately slandered/libeled other retailers, etc? For those who read the Wall Street Journal’s story on this topic in yesterday’s paper, a number of competitors were delivered a ‘black eye’ in the PR department. Retailers have had to wrestle with zoning points, and that is not going to change. Another instance of “all politics is local” raised. Brandeis pointed out from the bench years ago that, “Sunlight is the best antiseptic.” The Fourth Estate has to play a role in providing a bit of ‘Sunlight’ and ask the Saint firm, Supervalu, the unions, etc, as well as local politicians, if anything crossed those ‘fine lines’. The city of Mundelein, Illinois is shy some $6 million dollars in added tax revenues. They should be raising the question as to the impact on their… Read more »
George Anderson
Guest
George Anderson
10 years 11 months ago

Unions will be made the scapegoat here by some, but it’s clear that the companies that employ their members are often less forthcoming when it comes to using front groups to achieve their goals. Fairness would seem to demand transparency in cases such as this. If you are a person or a company and believe enough in a cause to support it financially, you shouldn’t have an issue with making that known publicly.

David Livingston
Guest
10 years 11 months ago

This seems like normal business practice that has been going on for a long time, long before there even was Wal-Mart. I’m sure Wal-Mart has a company they hire to help advance their cause as well. When I donate money to a politician, I expect him to act on my behalf and vote for the things that will benefit me. Retailers will often fund local political machines with the agreement that they will not approve plans or building permits applied for by competitors. It’s also nice to see labor and management working together for once.

Whether a chain is bankrolling Saint Consulting or the local mayor, I don’t think customers really care. Political contributions are no secret and public information, often printed in the newspaper. Retail consumers couldn’t care less.

David Biernbaum
Guest
10 years 11 months ago

I’m not shocked that Walmart’s competitors are funding groups that will attempt to disrupt or block the opening of Walmart stores. If it’s being done in a legal way then so be it. I don’t like to get in to debating ethics because at the end of the day, that’s really up to each business–and each consumer–to determine and decide.

Dan Raftery
Guest
10 years 11 months ago

Another interesting point revealed in the WSJ article: the tactics used by the Saint teams are borrowed from politics. So the ethics question is really about cultural degradation, rather than about business practices. I expect that, since so many people shop at Walmart, when/if this story is heard by the masses, the clients of Saint might see a bit of a backlash, but have already likely seen the effect on sales. Reminds me of Don Quixote. I am surprised that the consultancy has been able to continue to sell this project, given the fact that they only slow the expansion at best.

Bill Emerson
Guest
Bill Emerson
10 years 11 months ago

One perspective not discussed is the impact on the low or no-income consumer. We have a group of unions and retailers that can’t compete and, instead of investing their money in figuring out how to be more competitive, pay some out-of-towners to come in, misrepresent themselves, and, uh, “bend” the truth to increase their revenue stream.

As a result, jobs are lost, tax revenues are reduced, and the low income consumer has less choices. Something is definitely wrong with this picture.

Cathy Hotka
Guest
10 years 11 months ago

This is nothing new–good old fashioned lobbying. And the Supreme Court’s recent decision to allow corporations to openly advocate for political candidates will result in a huge influx of new lobbying efforts. Expect more….

Ed Rosenbaum
Guest
10 years 11 months ago

Of course these companies have to do a full disclosure. Just think of the public outpouring and legislative pontificating if it were Walmart in the role of the aggressor. Fairness is supposed to benefit both parties just as leveling the playing field. Back door politics as usual should be out of the question here.

Gene Detroyer
Guest
10 years 11 months ago

When businesses choose to compete in areas other than their core business, it is a sign that they can’t compete. I recommend that they figure out why they can’t compete and fix it. They are taking their eye off their business. If Wal-Mart isn’t the one to beat them, someone else will.

Historically, this type of behavior is a sure sign of businesses in decline.

David Schulz
Guest
David Schulz
10 years 11 months ago

I don’t see why the discussion question refers only to “companies.” Why not include unions, non-profit groups and ad hoc advocacy groups in requiring transparency?

Any time your business model involves hiring consultants whose operatives must assume false identities and mislead public officials and the public at large you are treading very close to the unethical and possibly illegal. It is reprehensible for any company to engage in such activity except, perhaps, if national security or public safety were involved.

Herb Sorensen
Guest
10 years 11 months ago

As long as government plays a major role in the success or failure of businesses, businesses will corrupt government, and vice versa. Arguing whether government is good or bad is a little like arguing whether food is good or bad. But there seems to be an awful lot of people who favor a fat slobbery government, with apparently no concept of its proper role.

X X
Guest
X X
10 years 11 months ago

Did Supervalu use the same tactics against Target?

SuperTarget and Target grocery is a big competitor against the Supervalu banners. An example would be the fierce market share battle in both Supervalu’s and Target’s home turf in Minneapolis/St. Paul, Minnesota. Target is hitting Cub (a Supervalu banner) hard.

Although Target is becoming self-distributing in grocery, Supervalu still does supply grocery to Target with Supervalu Wholesale.

What will be the fallout of TGT vs. SVU?

Lee Peterson
Guest
10 years 11 months ago

The irony here is so thick it hurts my head. After years of busting Sam Walton’s chops for supposed unscrupulous dealings, turns out, his competitors were the ones being below board and competing in um, creative ways. Walmart, on the other hand, simply handed them their lunch with better prices, selection and stores. Imagine that. Ouch.

I guess in the end, it’s really not surprising. And worse, even with this information, the general perception of Walmart as “the great evil” will probably not change. Except for those of us in the know, right?

Charles P. Walsh
Guest
Charles P. Walsh
10 years 11 months ago

If these were local grassroots actions by citizens of the communities into which Walmart were seeking to build stores it would be perfectly fine. Their success or failure would likely be a more true reflection of the community at large.

When a competitor hires third parties with few or no ties to the community and whose motives are not based upon serving the local community but are more about preserving a competitive edge it crosses the line and is clearly “dirty politics” and in my opinion, unethical in its approach.

James Tenser
Guest
10 years 11 months ago

Finally we have some WSJ confirmation: That retail businesses play hardball; That unions and chains will collaborate against a common enemy; That many “grass roots” movements are in reality engineered by professional organizers who shield their identities and those of their clients. Who would have suspected?

I’d be truly surprised to learn there is only one Saint Consulting out there stirring the pot and using delaying tactics to drive up the development costs of targeted competitors. Who does Walmart call for countermeasures? Blackwater (now known as Xe Services)? The Teamsters? The North Koreans?

Sarcasm aside – while I understand and approve of the concept of zealous advocacy, the tactics described here seem ethically questionable and bad for PR. If the same vigorous efforts were pursued in a more above-board fashion, the work of Saint and others might seem much more like a public service to the local communities. Nothing sanitizes like sunlight.

Craig Sundstrom
Guest
10 years 11 months ago

The responses here seem to fall along the predictable lines of “free speech” or “people shouldn’t but everyone does, so…”

Two arguments seem to be missing: first, to what extent should motivation be considered; i.e. should a valid message be discounted just because the messenger has an ulterior motive? (And contrarily–somewhat along the lines of “the road to Hell is paved with good intentions”– should a shroud of legitimacy be layered on some group just because it claims the hallowed title of “grassroots”?)

Second, and somewhat surprisingly, none of our resident libertarians has pointed out that this is just another reason to get rid of all the zoning requirements, labor laws and other “government interference” that often serves as a pretext for protesters to advance their hidden agendas.

Eliott Olson
Guest
Eliott Olson
10 years 11 months ago

Covert political manipulation can be a slippery slope. Where is the dividing line between political support and bribery? This is like doing business in some South American countries where you don’t buy the politician, you hire a local nephew of the politician as a country representative. Did that one VP at Wal-Mart cross over or did he have a covert understanding from Sam and just get sloppy? How will covert actions influence the buyer who needs a new patio?

There are laws against contract interference. Could these procedures violate those laws? What if I had a gumshoe follow my competitor’s salesman around town and get the police to ticket any moving or parking violation that they made and get the person so frustrated that they quit? Would that be ethical?

I think executives should live by the saying “Do unto others as they would do unto you.” If they concentrate on doing that to their customers they will be ok.

Bill Doran
Guest
Bill Doran
10 years 11 months ago

Secrecy is key to Saint’s success in these operations. Did Saint’s desire for notoriety get ahead of his desire for success and income? You can bet reprints of the WSJ article will be a part of the Walmart developer’s arsenal for years to come.

Carlos Arambula
Guest
10 years 11 months ago

As unsavory as it is, it is legal and not a new practice. It’s also legal for consumer and trade press to expose such arrangements.

In my opinion is is the press who has a responsibility to promote clarity and truth to consumers and communities who often fail in this scenario.

Mark Burr
Guest
10 years 11 months ago

The answer to the survey question I think is misdirected. Should companies be required to expose their funding to organizations? No. Should organizations be required to disclose their funding sources? Yes.

Devangshu Dutta
Guest
Devangshu Dutta
10 years 11 months ago
Of course, Walmart has its baiters and haters who would justify using every means possible to beat down a company they see as unfair in many of its dealings. All’s fair in love and corporate war, and all that. However, the irony here couldn’t be thicker, as I recall “The Saint” (Simon Templar). Are Saint Consulting positioning themselves as the Robin Hood of the retail sector? If so, much as we might romanticize the image, let’s not forget that “Robin Hood” was perceived as Robbin’ Hood by the other side. I’m sure that many of us–perhaps most of us–would like a world where thoughts and opinions are shaped by integrity and by truly knowing what’s right. In fact, to the contrary, what’s right is often a matter of opinion, and PR and lobbying is all about shaping opinion. What may be unsavory to our mind, may be totally legit to someone else. When so much is for sale in the retail market; why not a little bit of conscience as well?! I’ll be interested in… Read more »
monica miller
Guest
monica miller
10 years 11 months ago

Suppose my company jumped through all the hoops and paid every tax and followed every rule before opening a store. Then Walmart decides they want to move to town. Since they are a bigger company and promise to hire more people and attract more business to the area, they get breaks in zoning and taxes that were not offered to me. Why is it unethical to hire someone to make Walmart follow the same rules I did?

Also, even though the article is in the WSJ, how reliable is a source that gives away confidential information? Do you really think he gave the names of companies he plans to keep as clients? Or, is it possible the companies were not happy with his ethics and decided not to continue with his services?

Ed Dennis
Guest
Ed Dennis
10 years 11 months ago
Well it might not be illegal, but it really doesn’t smell like America. For years I have railed against lazy management in many of America’s supermarket chains. They have continually spent lavishly on one silver bullet after another. Each in turn was supposed to solve their management incompetence. What each needed to do was run their business to provide quality and service. Instead, each of these “giants” has chosen to compete on price alone. This has lead to hiring the cheapest workers, providing minimal training, and doing little to ever get management out of their offices and out with their customers. One of their buyers has the easiest job in the world. They don’t have to know anything about quality because they are told to buy the cheapest product that meets their minimal requirements. So does it surprise me that these miscreants hire firms to try and impede competition? Somehow this seems like it should be against the law. I think in the long run you will see this firm (Saint) go out of business… Read more »