Bianna Golodryga: "...Wake-Up Wal-Mart, a union financed group highly critical of the retailer has provided ABC News with a confidential memo from a former ad agency with a dire warning."
The memo, which is six months old and amounts to nothing more than an embarrassing behind the scenes discussion of Wal-Mart’s strategy to market high-end goods, seemed to simply be a pretext for GMA to bash the company. Golodryga piled on, noting that "the leaked memo is just another blow to a company which has experienced its share of blunders this year, ranging from sexual discrimination lawsuits to a recent war of words with a fired ad executive." The segment also featured a representative from the left-wing Wake up Wal-Mart group slamming the company’s "poor values," while having nobody on to defend it:
Chris Kofinis (Dir of Communications, Wake Up Wal-Mart website): "Wal-Mart's biggest challenge right now is its reputation, and it's loss of focus and its, really, it's poor values."
Golodryga closed the report by allowing that many consumers do still have a positive image of Wal- Mart. She also stated, "Now, we must add that this was a 2006 memo. It's an old memo." Then what, exactly, is the relevancy? Or was the point of the story simply to spout liberal talking points?
For more on the relentless media assault on Wal-Mart, head over to the Business and Media Institute’s February 2006 report.
A transcript of the segment, which aired at 7:17am on May 31, follows:
Elizabeth Vargas: "Now to the world's largest retailer, Wal-Mart, facing a tough morning. The company's high-stacks annual shareholders meeting is getting under way in Arkansas. And at the top of the to-do list, resuscitating Wal-Mart sales which are in a slump. Now a confidential, internal memo leaked to ABC News is adding to Wal-Mart's woes. ABC's Bianna Golodryga is here to explain. Bianna?"
Bianna Golodryga: "Good morning Elizabeth. Well, Wal-Mart is bracing for a rough shareholders meeting. Its sales are down already and some are saying its new strategy of appealing to upscale shoppers may be backfiring. Well, now, Wake-Up Wal-Mart, a union financed group highly critical of the retailer has provided ABC News with a confidential memo from a former ad agency with a dire warning. Do low prices translate to low quality? It's a high-cost question for the retailing giant Wal-Mart. Just last month, the world's largest retailer reported a 3.5 percent plunge in store sales, its worst monthly decline on record. Now, according to the leaked memo from October of 2006, Wal-Mart's ad agency says it knows why sales are off, saying shoppers simply aren't buying a new strategy to offer high-end products along with the chain's traditional low-cost goods. 'When shoppers compare prices,’ says the memo, 'our low prices actually suggest low quality.' The company dismissed the report saying, ‘This particular piece of work is not very useful, not least because it's now completely out of date and in some areas just plain wrong.' The document adds that, while Wal-Mart is still America’s top discount chain, its new strategy has given new opportunities to its competitors."
Patricia Edwards (SR VP, Wentworth Hauser & Violich): "Target, Kohls, JC Penny, they are all eating their lunch at this point."
Golodryga: "The leaked memo is just another blow to a company which has experienced its share of blunders this year, ranging from sexual discrimination lawsuits to a recent war of words with a fired ad executive."
Chris Kofinis (Dir of Communications, Wake Up Wal-Mart website): "Wal-Mart's biggest challenge right now is its reputation, and it's loss of focus and its really, it's poor values."
Golodryga: "The memo does suggest that overall consumers still believe that shopping at Wal Mart does save them time and, more importantly, money. In fact, when asked to compare the retail behemoth to a person, favorable comparisons, such as a handyman or even Uncle Sam come to mind. And now the pressure is on Wal-Mart's CEO Lee Scott to keep shoppers happy. The measure they're giving, don't forget about your core customers who are much more interested in low prices than high priced goods. Now, we must add that this was a 2006 memo. It's an old memo. Wal-Mart is reverting to focusing to the basic three Ps of marketing: Product, placement and prices."
Elizabeth Vargas: "And those shareholders will be interested in all of that."
