Wal-Mart Goes 'Back to Basics': A Cautionary Tale for the Left
After suffering seven straight quarters of losses, today the merchandise giant Wal-Mart will announce that it is "going back to basics," ending its era of high-end organic foods, going "green," and the remainder of its appeal to the upscale market. Next month the company will launch an "It's Back" campaign to woo the millions of customers who have fled the store. They will be bringing back "heritage" products, like inexpensive jeans and sweatpants.
Few may recognize it as such, but this episode should be seen as a cautionary tale about "progressives" and social engineering experiments on low-income Americans. This morning's Wall Street Journal article is blunt:
That strategy failed, and the Bentonville, Ark., retail giant now is pursuing a back-to-basics strategy to reverse the company's fortunes.
The failure, in large part, can be pinned to Leslie Dach: a well-known progressive and former senior aide to Vice President Al Gore. In July 2006, Dach was installed as the public relations chief for Wal-Mart. He drafted a number of other progressives into the company, seeking to change the company's way of doing business: its culture, its politics, and most importantly its products.
Out went drab, inexpensive merchandise so dear to low-income Americans. In came upscale organic foods, "green" products, trendy jeans, and political correctness. In other words, Dach sought to expose poor working Americans to the "good life" of the wealthy, environmentally conscious Prius driver.
Dach's failure should be a cautionary tale for President Obama: last week he scolded a blue collar man in Pennsylvania for driving an SUV, and he has previously admonished Americans to get out of their gas-guzzlers and into electric cars. Dach's failure should also put Michelle Obama on notice; she has been pushing her White House organic vegetable garden as a model for working Americans.
Like other real-world experiments, the Wal-Mart story exposes the failure of progressivism in the marketplace, as the Dach strategy has been a fiasco: the merchandising turned off low-income (and largely Democratic-leaning) customers. Says former Wal-Mart executive Jimmy Wright:
The basic Wal-Mart customer didn't leave Wal-Mart. What happened is that Wal-Mart left the customer.
Dach convinced the company to steer away from founder Sam Walton's core values. At the core of Dach’s campaign was to prove that Wal-Mart was "going green." He brought in Vice President Gore to speak about environmental issues: they actually screened his global warming film, An Inconvenient Truth, at a quarterly meeting of Wal-Mart empl0yees and invited environmental groups. Expensive organic foods were showcased in their produce section. Trendy and pricey environmentally safe products were put on the shelves.
Richard Edelman of Edelman Public Relations -- who had once hired Dach -- noted that Dach constantly pushed Democratic Party health care and environmental agendas inside the giant company. Writes the New Yorker:
Richard Edelman suggested that he is seeing Dach’s influence on the company. Edelman called Dach an “idealist” who has carried to Wal-Mart his fervor for such traditional Democratic causes as universal health care and environmentalism.
The Sierra Club's Carl Pope seemed pleased that Dach was inside the enemy camp, confiding to the New Yorker:
One of the remarkable things about the environmental movement is how rarely people from our side end up on the other side, and Leslie is on the other side.
But Dach's fervor only sunk the company. Andy Barron, a Wal-Mart executive vice president, told an investor meeting:
Clearly, we've lost some of our focus on what I would call the core customer. ... You might say, in short, that we were trying to be something that maybe we're not.
George Siemon, CEO of Organic Valley -- the nation's largest organics cooperative -- said to the WSJ:
Is the Wal-Mart customer ready to embrace a full set of organics products? The answer is no, not yet.
This is probably not what Michelle Obama wants to hear.
For leading the failed experiment, Dach was awarded three million dollars in stock and a hundred and sixty-eight thousand stock options, in addition to an undisclosed base salary.
Summing up the mess, mechanic Mike Craig told the WSJ:
Wal-Mart just went and broke it.