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Wal-Mart changing its tune, and singing it

“Wal-Mart: The Musical” opened way, way off-Broadway Friday to a standing ovation. Of course, the audience was packed with thousands of employees and shareholders
/ Source: Reuters

“Wal-Mart: The Musical” opened way, way off-Broadway Friday to a standing ovation.

Of course, the Fayetteville, Arkansas, audience was packed with thousands of Wal-Mart Stores Inc. employees and shareholders, as the company kicked off its annual meeting with an hour-long, mini-musical that emphasized changes at the world’s largest retailer.

Wal-Mart has been touting improvements ranging from more fashionable clothing and organic products in its stores to attempts to be more environmentally friendly, including an overhaul of its fleet of trucks to avoid spewing diesel fumes while goods are being delivered. (New power units keep air conditioning on in the trucks while their engines are off.)

Wal-Mart has a legion of increasingly vocal critics who have hammered the company for what they consider poverty-level wages and stingy benefits for its employees.

At the same time, the company is pushing to overcome an image as a retailer whose customers shop in its stores for cheap prices on basics like laundry detergent and toilet paper, but then go off to competitors Target Corp. and Best Buy Co. Inc.for trendier fashions and electronics.

Target’s sales growth has far outpaced Wal-Mart’s in recent quarters, and the trend continued last month, when Wal-Mart posted a 2.3 percent increase in sales at its U.S. stores open at least a year, while Target’s rose 5.7 percent.

Still, Wal-Mart’s shares were up 3.4 percent this year through Thursday while Target’s shares were down 10.4 percent amid concerns that Wal-Mart’s push into higher-priced items could cut into Target’s sales.

The retailer, which draws some 130 million U.S. shoppers a week, is trying to entice those shoppers to spend more at Wal-Mart, with items like baby clothes made of organic fabrics, plasma televisions and its Metro 7 clothing line.

The musical that opened the annual meeting — held at the University of Arkansas’s Bud Walton Arena — included a number that encouraged customers to “Step Across the Aisle,” in which one character sings: “They stop to buy a Milky Way, discover we have Chardonnay.”

Interspersed with production numbers with performers dancing around with grocery carts and a Broadway-style ballad ”The Day That I Met Sam” that harked back to Wal-Mart founder Sam Walton, the company showed videotaped messages from executives.

Those executives pushed everything from fast-selling products, such as a $470 patio set; to overhauls of break rooms, to make employees of its Sam’s Club stores more comfortable; to the company’s international growth.

“Nobody loved change more than Sam Walton,” the founder’s son and current chairman, Rob Walton, said in his remarks following the musical. But he also conceded that his father might have been surprised at the pace of change.

Lee Scott, Wal-Mart’s chief executive, summed up the changes with the slogan “Wal-Mart Out in Front,” a program that includes becoming a better place to work, broadening Wal-Mart’s appeal to all customers, improving operations and efficiency, driving international business and making “unique contributions to the community.”

“We are changing more rapidly and profoundly than we ever have,” Scott said.

But one thing that hasn’t changed much over the past several years is the company’s stock price. Wal-Mart stock finished September of 1999 at $47.56, almost exactly where it was trading Friday afternoon.

“I’d like to see some income,” one frustrated shareholder said during the question and answer session. “I can’t wait forever. I’m 80 years old.”

The Wal-Mart annual meeting is as much a pep rally for employees as a business meeting where board members are elected and shareholder proposals are heard. Aside from the musical, employees were also serenaded by Beyonce and recent American Idol winner Taylor Hicks.

But not all attendees were at the meeting to do the Wal-Mart cheer and be entertained by big production numbers.

Among the critics were shareholders bashing the company for what they called the out-sized disparity between the compensation of top executives and lower-level store employees, calling on the company to disclose its political contributions and advocating humane slaughter for chickens sold in the grocery aisles.

None of the shareholder proposals introduced at the meeting was approved.