Wal-Mart plays host to media

Wal-Mart plays host to media

	Published : Fri, 01 Jun 2007 00:18 By : Agencies Print this Story

BENTONVILLE, Ark. (AP) - Wal-Mart Stores Inc., under pressure from labor-backed groups to improve its health care plan, touted its $4 prescription drugs and its in-store health clinics as helping to eliminate millions of dollars in costs from the U.S. health care system.

'We have a unique ability to reach a lot of people in a way no one else has,' said Bill Simon, executive vice president and chief operating officer of Wal-Mart's U.S store division, in an address Thursday to about 60 journalists gathered near its headquarters here at the company's third annual media conference.

The one-day conference, scaled down from a year ago, comes a day before the world's largest retailer faces tough questions from thousands of shareholders about how the company will re-ignite sales growth and increase its stock price, which has gone nowhere in the last few years.

Simon noted that the company's program to offer $4 prescription drugs now accounts for 40 percent of all prescriptions filled at Wal-Mart stores. He estimated that total savings to customers and employees is about $350 million since the program was rolled out six months ago, and he projected the program will eventually remove $1 billion in health care costs. He added that nearly 30 percent of the prescriptions filled are for those customers without health insurance.

Wal-Mart has also had success with its in-store clinics, which number 77 across 13 states. Simon said Wal-Mart expects to add 400 clinics in the next three to four years and have as many as 2,000 in the next five to seven years.

Simon emphasized that unlike some of its competitors, Wal-Mart is not using the clinics to necessarily drive traffic but to 'deliver value' for its customers. About 50 percent of those who walk into the clinics, which are staffed by nurse practitioners and treat basic conditions like the flu or skin infections, have no health insurance.

Wal-Mart has made some strides in making its own health care plan more affordable, offering a plan for as little as $11 a month and cutting its waiting period for part-time employees to be eligible to 12 months from 24 months. Still, union-backed critics say that their efforts are not enough.

Linda Dillman, executive vice president for risk, benefits and sustainability, told reporters Thursday that about 90.4 percent of Wal-Mart associates reported having some form of health coverage, either through Wal-Mart or another source. Dillman noted that about 47.4 percent of Wal-Mart workers are on its health care plan, and defended the low participation by saying that most employees don't look at Wal-Mart as its primary source of income.

The conference, which also included tours of a local Sam's Clubs and a Wal-Mart Supercenter, will also include presentations on sustainability and its business in China later Thursday. The media conference represents Wal-Mart's attempt to better define its public image, rather than having it be shaped by critics.

Still, the bad news keeps piling on. Last year, a big emphasis at Wal-Mart's media conference was its strategy to pry more money from its wealthier customers by upgrading products including sheets, electronics, towels and fashions. But its home apparel and fashion strategy flopped, and Wal-Mart is now renewing its focus on low prices in a bid to turn around sluggish sales.

Wal-Mart, facing increasing criticism from groups like WakeUpWalMart.com that want the company to be more generous with its wages and health care, is also struggling with reputation issues. A report from Wal-Mart's former ad agency, GSD&M, which was leaked by WakeUpWalmart.com to the media, told the company that while its low prices are 'a positive force,' the company suffered a lack of respect that could drive shoppers away.

Analysts have blamed such negative headlines for helping to depress the company's stock, which three years ago traded around $55. The shares rose 48 cents to $47.60 Thursday.