Wal-Mart seeks to leave blues behind with a song and dance

If the Stock Arranging Blues are the only morale problem affecting Wal-Mart's 1.8 million employees, then the retailer's army of critics is doomed in its campaign against alleged poverty wages and poor working conditions.

The Stock Arranging Blues was the title of the slow musical number at Wal-Mart's all-singing, all-dancing shareholder meeting yesterday, more of a pop concert than a financial event. Performers whizzed around the stage on shopping trolleys and sang didactic songs about how to be a good employee and how shoppers who "stop to buy a Milky Way, discover we have Chardonnay". There was even a performance from Taylor Hicks, the newly crowned American Idol, the US equivalent of Pop Idol.

It was all a million miles from the perfunctory presentations and curly sandwiches of the average British company's AGM, and the 15,000 employees who attended from across Wal-Mart's global empire lapped it up.

But behind the show, a serious message: Wal-Mart is changing. Littering his speech with jokes but not, thankfully, dancing, the chief executive Lee Scott drove home how Wal-Mart must get its customers to buy more expensive produce - not just the discount-price basics for which the company is famous. The need to get customers to Step Across the Aisle (in the name of the musical's theme song) is exercising not just the company's management but also, increasingly, investors on Wall Street.

Wal-Mart's sales growth in May was 2.3 per cent and is likely to be less in June, in contrast with more upmarket rivals such as Target, which is growing at more than 5 per cent. Wal-Mart says its core low-income customers are spending less because petrol prices have gone up so sharply, but there is growing scepticism that this tells the whole story.

Mr Scott promised more experimental stores, including outlets that will tailor their ranges to local Hispanic populations. Last year, Wal-Mart executives ditched the one-size-fits-all approach of the past, but the company felt the need yesterday to assure the employees - it calls them "associates" - that "change is nothing to be frightened of".

Not everyone had come to Fayetteville to cheer and to tap along to the showtunes. Among the critics were those bashing the company for what they called the outsized disparity between the compensation of top executives and lower-level store employees, some calling on the company to disclose its political contributions.

Mr Scott countered critics of Wal-Mart's labour conditions by pointing out that as many as 25,000 people can apply for just 320 jobs at a new store. "People want Wal-Mart jobs because we offer good jobs," he said. There was another cheer.