Wal-Mart ‘Going Good’
By George Anderson
Critics of how it treats its employees at home are not likely to give Wal-Mart any points for trying or they may slough it off to public posturing, but there is no doubt that the world’s largest retailer has set a bar for its suppliers and itself after a speech made yesterday by CEO Lee Scott to attendees at a conference on retail trends held by the Sam M. Walton College of Business at the University of Arkansas.
In his remarks, Mr.Scott said the retailer would be demanding foreign manufacturers live up to higher social and environmental standards as a requirement to continue doing business with the retailer.
They will have to, said Mr. Scott, because it is retailers and not manufacturers who are taking the heat when suppliers impose sweatshop-like conditions on employees or engage in practices that harm the environment.
“The factories in China are going to end up having to be held up to the same standards as the factories in the U.S.,” he said. “There will be a day of reckoning for retailers. If somebody wakes up and finds out that children that are down the river from that factory where you save three cents a foot in the cost of garden hose are developing cancers at a significant rate so that the American public can save three cents a foot, those things won’t be tolerated, and they shouldn’t be tolerated.”
Mr. Scott announced he was flying to Shanghai next week to begin checking stores and factory operations in the region.
Wal-Mart’s chief said that he knew his talk would come as a surprise. “There are people in this room that hear what I just said and say ‘Wow, Wal-Mart is losing its way. Wal-Mart is not going to talk about customers. They’re talking about sustainability and the factories they buy from.’
In one example of Wal-Mart’s new focus on “going good,” Mr. Scott said the company would start selling clothing made from organically grown cotton next year.
“We’re going to take thousands of tons of pesticides out of the environment and produce a better garment for our customer and a garment that they can be proud of. Those are the kinds of solutions that exist out there that take more sophistication,” he said.
Moderator’s Comment: What is your reaction to the reports of Lee Scott’s speech yesterday? What will it mean for Wal-Mart, its suppliers, competitors
and customers? –
George Anderson – Moderator