Katrina brings out Wal-Mart’s inner good guy

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Millions in corporate-image advertising in the past year failed to do much to help Wal-Mart's reputation, shredded by disappointing business results, news stories about its lowest-paid workers getting Medicaid and food stamps and charges of embezzlement against its multimillionaire former No. 2 executive. But now, in the wake of Hurricane Katrina, Wal-Mart is getting the kind of advertising no marketer can buy.

As local, state and federal officials looked flummoxed by the worst natural disaster in U.S. history, Wal-Mart had 45 truckloads of relief supplies ready to ship before Katrina made landfall. In a tearful interview on NBC's "Meet the Press" on Sept. 4, the president of Louisiana's Jefferson Parish said: "If the American government would have responded like Wal-Mart ... we wouldn't be in this crisis." Later, the mayor of Kenner, La., suggested on MSNBC that the Federal Emergency Management Administration should learn logistics from Wal-Mart.

A day later, Wal-Mart CEO Lee Scott, who personally spearheaded the retailer's disaster response, was appearing alongside former Presidents Bush and Clinton as they announced their national relief effort. Mr. Clinton, in a sound bite picked up by news reports, praised Wal-Mart as a model of enlightened labor practices for letting workers from hurricane-ravaged areas transfer to other stores.

As the Federal Emergency Management Agency was still preventing some relief shipments from entering New Orleans a week after the hurricane for reasons as murky as the flood water, Wal-Mart had nonetheless shipped 1,900 trailer loads of emergency supplies to affected areas.

It also had pledged more than $22 million in contributions to relief efforts and was operating free stores in several evacuation centers, where it also donated 150 Internet-ready computers to help reunite loved ones separated by the disaster.

No criticism?

"Through this tragedy, they gained a lot," said New York PR guru Howard Rubenstein. "Their PR followed a superb, substantive series of actions, so there could be absolutely no criticism."

Katrina could also help Wal-Mart achieve some welcome relief from media scrutiny. Mr. Scott said at a Sept. 7 investor conference in Boston that rising oil prices are likely to push at least two or three oil companies past Wal-Mart in rankings of the world's biggest corporations this year. "It is my hope and desire that [the oil companies] get all the media attention that they deserve," he said dryly to widespread laughter.

Mr. Scott said the Katrina-related coverage has been "extraordinarily helpful in helping to at least turn the tide a little bit on the press we have had."

Even potentially negative publicity for Wal-Mart from Katrina got deflected, sometimes by third parties. Looters emptied one New Orleans Wal-Mart of guns and ammo, prompting some bloggers to blame the retailer for not securing them better. But even on an anti-Wal-Mart site, one such critic was attacked by a fellow Wal-Mart basher. On CNN, a New Orleans police officer noted the gun looting happened after Wal-Mart opened to let people take food and water.

Wal-Mart at least temporarily disarmed even leading critics. "Wal-Mart chose to do the right thing, clearly," said Chris Kofinis, communications adviser for the union-backed Wake-Up Wal-Mart campaign. "But that also says to us they could choose to do the right thing every day."

To that end, the group had 30 protesters greeting Mr. Scott at the investor conference, and he said Wal-Mart's PR struggle isn't going away any time soon. "This is not a matter of Wal-Mart just needing to hire public-relations people," he said.

But Wal-Mart is doing just that. Last month it brought independent Edelman on board a roster that already included Omnicom Group's Fleishman-Hillard and WPP Group's Burson-Marsteller. Edelman handled some work around the Katrina response, said Vice Chairman Leslie Dach, who runs Edelman's Washington office. Wal-Mart also dispatched its own PR staff to evacuation and emergency-response centers.

Daily effort

The Katrina response wasn't done for PR purposes, Mr. Scott said at the conference. But he added that it did highlight what Wal-Mart does all the time. And just so the good work wouldn't go unnoticed, Wal-Mart devoted daily media updates and most of its PR Web site last week to Katrina relief.

By Sept. 8, Wal-Mart had on air a new TV ad from Omnicom Group's GSD&M, Austin, showing associates talking about the retailer's Katrina-relief work and seeking donations to the Salvation Army and the American Red Cross.

Mr. Scott said Wal-Mart is also getting better prepared on the broader marketing front. Exec VP-Marketing John Fleming, appointed earlier this year, is "creating a team that is much better in depth and breadth than what we've ever had," he said.

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