Wal-Mart preaches diversity to suppliers

Ashley Milne-Tyte Feb 21, 2007

Wal-Mart preaches diversity to suppliers

Ashley Milne-Tyte Feb 21, 2007

KAI RYSSDAL: Wal-Mart seems to be bouncing back from its sales slump. The retail giant announced improved fourth quarter earnings yesterday. And the company’s continuing its PR campaign, too. It announced earlier this week it’ll be moving into economically depressed areas trying to improve inner-city life.

And today, the Financial Times reports Wal-Mart has approached its major suppliers with yet another initiative. Ashley Milne-Tyte has that story.

ASHLEY MILNE-TYTE: Wal-Mart says it wants more diversity among suppliers so it can better reflect the make-up of its customers.

Charles Fishman

of Fast Company magazine has written extensively about Wal-Mart. He says while Wal-Mart critics may carp about opportunism . . .

CHARLES FISHMAN: Here’s something they’re doing that we think is good. If you want companies to change, you need to be supportive when they do something that you like, and I . . . I think this is a really interesting move.

Although, he says, some suppliers might not welcome the idea of Wal-Mart meddling in their affairs.

The move follows a successful push to get law firms that work for Wal-Mart to up the numbers of women and minority lawyers. The retailer’s muscle means its latest initiative could have a major effect on diversity at suppliers.

Still, Dan Butler

of the National Retail Federation says Wal-Mart’s not in the vanguard here.

DAN BUTLER: Well I think that there are many other companies who have reached out to their vendor communities. But I also wouldn’t take away from the accomplishment that it is for them to be doing it at this point in time.

Meaning, he says, that the company’s internal diversity program is strong enough that the time is ripe to branch out.

Retail analyst Howard Davidowitz

confirms Wal-Mart is continuing work it’s already begun.

HOWARD DAVIDOWITZ: The biggest efforts they’ve made, frankly, is by linking bonuses for its senior managers to making diversity targets. And Wal-Mart did that two years ago.

Davidowitz says these moves may well be in response to problems Wal-Mart has been facing, such as accusations of sexual discrimination. Still, whatever the motive, he says, the company’s doing the right thing.

I’m Ashley Milne-Tyte for Marketplace.

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