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Wal-Mart launches battle against critics

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LITTLE ROCK, Ark. — Wal-Mart Stores Inc. chief executive Lee Scott led a media charge Thursday to counter criticism that the world's largest retailer is a behemoth that takes advantage of its workers and stifles competition.

Scott said he wants Wal-Mart workers to know the company was speaking up for them, and he wants Wal-Mart to have a better handle on how it is perceived among members of the public.

The company bought full-page ads in more than 100 newspapers around the nation to highlight its message that it provides opportunity for advancement and that its stores provide mainly full-time jobs that come with a broad benefits package.

"We want to get those myths off the table, set the record straight," Scott said in a phone interview. He was in New York City for a round of media interviews.

But a union critic of the discount chain said Thursday the company was ignoring social costs created by its megastores. The United Food and Commercial Workers Union said Wal-Mart was bending the truth.

Union spokesman Greg Denier said Wal-Mart may count about three-fourths of its workers as full time, but he said those employees don't get full 40-hour weeks. He said the health insurance the company touts is too expensive and does not provide enough coverage for illnesses that are short of catastrophic.

Wal-Mart has 1.2 million employees in the United States, making it the nation's largest private employer. Scott said Wal-Mart gives com-

munities stable jobs, and workers have advancement opportunities and benefits that include stock purchase, a 401(k) retirement plan, discount cards and other benefits.

Scott said the company wants to take its message directly to its customers and their communities.

"Customers trust us, and they want to know their trust is well placed," Scott said.

That's true of some Wal-Mart shoppers but not most, said Jim Rice, chief credit officer at Bernard Sands Retail Performance Monitor in New York.

"I don't think a majority of shoppers pay attention to either the charges or to Wal-Mart's defense," Rice said. "If Wal-Mart has good selection and good prices, they'll keep shopping."

Rice said Wal-Mart was right to respond to its detractors.

"Any time you don't answer (criticism), you're going to suffer damage," Rice said, noting Wal-Mart often has let its critics speak and not mounted a defense. "This will have a positive effect."

Rice said the message from Wal-Mart would help rally employees and could resonate in communities where Wal-Mart wants to expand. The investment community is another matter.

"I don't think it will have a huge effect on (Wall) Street," he said.

Wal-Mart Stores Inc. fell 44 cents to close at $53.64 on the New York Stock Exchange Thursday, when most stocks were pressured by higher oil prices and concerns over the economy.

Rice also said the assertions by Wal-Mart could generate a backlash among the company's opponents. The UFCW has been striving for years to organize Wal-Mart workers.

Denier said the union took issue with almost every assertion Wal-Mart made, calling its claims "just deceptive."

Wal-Mart allows a worker to qualify for full-time benefits for working 34 hours a week. But Denier said people who hear that Wal-Mart has 74 percent full-time workers expect those employees to be putting in a regular 40 hours.

Wal-Mart has been the target of lawsuits accusing the company of bias against women and not paying employees for all the hours they worked. Wal-Mart has vigorously fought the court actions.

Joseph M. Sellers, an attorney in a gender discrimination lawsuit against Wal-Mart in San Francisco in which the plaintiffs want to bring in 1.6 million current and former female workers, took issue with Wal-Mart's claims.

"It is hard to reconcile Wal-Mart's claim that it is serving everybody when it systematically underpaid and under-promoted its 1.6 million women employees for nearly a decade," Sellers said in an e-mail.

Scott noted that the company has put in place a fresh diversity program and has made other changes to ensure greater fairness. He also said the company was eager to listen to its critics and will make changes when necessary.

Wal-Mart failed in an attempt last year to put a store in Inglewood, Calif., where the retailer lost a referendum. Critics painted the company as an unwanted source of traffic and low-paying jobs. There is a move in some cities to limit Wal-Mart, Target Corp. and other big box retailers because of the sprawl they bring.

Scott said the criticism from so many different directions has swallowed Wal-Mart's central message.

"I liken it to being nibbled to death by guppies," Scott said.