TOP WAL-MART EXEC DEFENDS RETAIL TACTICS

'Not Taking Over the World,' Gordon Erickson Assures MPA Conference

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WASHINGTON (AdAge.com) -- There are two Wal-Marts, a top executive from the world's most powerful retailer told attendees at the Magazine Publishers of America Retail Conference:
Wal-Mart's Gordon Erickson said the company was not 'amazingly monstrous.'
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the one known by its customers and the one depicted in the press.

Wal-Mart's customers "understand we're not an amazingly monstrous company taking over the world," said Gordon Erickson, senior vice president for general merchandise for Wal-Mart Stores. His presentation yesterday closed the conference. "What you read [about Wal-Mart] and what we are, are two different things."

Human face
Speaking extemporaneously and slowly pacing the space between two podiums, Mr. Erickson sought to put a human face on a $258 billion company that was just named, again, No. 1 on The Fortune 500 list of the largest American companies. He tied its success to the struggles of working-class families. He also offered numerous off-the-cuff illustrations of Wal-Mart's monomaniacal obsession with its customers and its intimate knowledge of their shopping habits.

He described Wal-Mart's idealized consumer as one Mrs. Smith of Neosho, Mo., a town in the Ozarks with a population of about 10,500. This Mrs. Smith, he said, was raising three children with her husband on a salary of around $30,000 a year.

"Every penny they spend is budgeted," he said. It was for the Mrs. Smiths of the world that Wal-Mart sought so aggressively to keep prices down, Mr. Erickson said. If Wal-Mart could save its consumers $500 a year, he said, they could "pay for Christmas." If it saves $5 for Mrs. Smith, that's "one more hour of piano lessons."

'Not you or I'
"This is money she really needs," Mr. Erickson later said. Such consumers, he told the crowd of magazine and retail executives, "are not you or I, but that's who our customer is." This mythological Mrs. Smith was reminiscent of a running anecdote from former Texas U.S. Sen. Phil Gramm, who often asked if government programs were worth placing additional taxes on one of his working-class constituents, a real-life printer from Mexia, Texas, named Dickey Flatt.

In keeping with Wal-Mart's publicity-shunning ways, Mr. Erickson declined to take any credit for Wal-Mart's successes, referring repeatedly to an "amazing man" who started the company 42 years ago (that would be founder Sam Walton, though his name went unmentioned). "I'm just a caretaker," he said about the company' relationship with consumers. "My responsibility is not to screw it up."

Tears for inflatables
But he spoke highly of Wal-Mart's "associates," the paid-by-the-hour employees who work at the stores and who assist executives such as himself. He told a story about two such associates, Fatima and Leia. A woman had an assembled an elaborate display of Wal-Mart-purchased Halloween-themed inflatables outside her home that were vandalized just before the holiday, breaking the heart of her child. Local Wal-Marts had sold out of the inflatables, and calls to headquarters eventually found Fatima and Leia, whose boss was in China on business. They took it upon themselves to locate and send the woman replacement decorations free of charge -- and a Wal-Mart distributor did likewise.

When that mother reached Mr. Erickson at company headquarters to express her gratitude, he said, she could not tell her story without breaking down in tears.

It was hard not to feel moved by this illustration of how deeply Wal-Mart listens to its consumers. And industry observers also see the tale as illustrating another side of the Wal-Mart equation. The pursuit of the lowest prices inevitably leads Wal-Mart executives such as Fatima and Leia's boss to do business in China. But it's the effects of cheap goods produced by cheap manufacturing in distant lands that are precisely what the company's detractors fear most from the Wal-Mart-ing of America: the exporting of jobs and the hollowing-out of communities in the U.S. -- the very charges of a "monstrous" Wal-Mart that Mr. Erickson sought to refute.

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