BREAKING DOWN WAL-MART CEO ON GOODWILL TOUR OF STORES TO POLISH CORPORATE IMAGE.

Byline: Candice Choi Staff Writer

Wal-Mart CEO Lee Scott Jr. appeared in the snack shop of his Panorama City store Wednesday and the remarkable thing is, he talked openly. Talked with employees. Talked with customers. Talked with the media.

The carefully planned goodwill tour comes after years of controversy stemming from racial discrimination lawsuits and broad criticism of the Arkansas company's living-wage policies at home and abroad.

``Not everyone's going to love us, and not everyone should,'' Scott said in a speech delivered earlier in the day at a town-hall meeting at the Omni Hotel in Los Angeles.

But he was doing his best to beat back the negative corporate image that's shadowed the behemoth retailer in recent years. The appearance was a continuation of the media blitz that began in January and marks a turnaround in the Arkansas company's previously tight-lipped attitude.

``We were naive in thinking we could just focus on our business and grow without talking to the media,'' Scott said while sitting at the snack counter in the Panorama City store. ``Our critics took advantage of that.''

During the town-hall speech, he stressed how the company's low prices and living wages have improved the quality of life for legions of people across the country.

After the speech, Scott fielded questions that touched on those controversies.

Addressing the discrimination lawsuits, Scott said the company has implemented a number of programs to drive diversity. Managers who do not hit their diversity goals have their bonuses reduced at the end of the year.

One woman praised Scott, recounting an instance when she visited a store in Arkansas, and an elderly receptionist showed her a photo of a party the company had thrown for he and his wife's 50th anniversary.

This year, 25 new Wal-Marts are planned to open in California, including a Supercenter in Palmdale.

Despite the sometimes harsh opposition Wal-Mart has faced in the state - particularly from the United Food and Commercial Workers Union - Scott said the area's high grocery prices and population of people who need low prices make the state and Wal-Mart a ``perfect marriage.''

In addition to the money saved in bargains, Scott said, the benefits and wages provide workers with a good living at home and abroad.

``The $10 people save on groceries can mean the difference in whether they get a DVD or eat out at McDonalds that week,'' he said in an interview later in the day.

The Panorama City store is fairly unique because of the urban environment that surrounds it, Scott said.

``The density's so great, people have a lot of choices around here,'' he said.

Still, the store must do a better job of having products that reflect the needs of a store's particular community, Scott said. In the coming months, he said, the company will improve in that area, whether that means having more Hispanic products in Hispanic neighborhoods or different products popular in certain areas of the country.

``Independent grocers have the ability to do that very well,'' Scott said.

Although the staff at the Panorama City store was told of Scott's visit, many nevertheless seemed taken aback when Scott - followed by a team of Wal-Mart executives, public-relations handlers and members of the media, stopped to chat with them.

Martha Herrera, the photo manager at the store, got a pop quiz from Scott on how much stock she had and where her merchandise is displayed.

Norma Armstrong, who owned a snack shop in the mall before Wal-Mart's arrival, said the area has improved dramatically since the discounter came to town.

Previously, Armstrong said, the area was devastated by businesses closing ``right and left.'' She herself was almost broke, she said.

After greeting Scott and embracing him before cameras, she said that after Wal-Mart came in ``it was like the sun was shining all over again. The momma and poppa stores starting doing well again.''

Customers strolled by with carts of fruit snacks and cabinets as Scott toured various departments.

``Two for $11,'' Scott pointed out while passing a giant bin of DVDs, which customers were digging through to take advantage of the deal.

Pancho Lopez, a Panorama City resident who was shopping at the store Tuesday, said he visits about five times a month for the bargains. Lopez, a construction worker, said he manages to save on products ranging from cosmetics for his wife to camcorder equipment.

Although he's heard of the lawsuits and wage complaints against Wal- Mart, he said he still shops at the store because, ``it doesn't affect me.''

Scott will make surprise appearances at several Los Angeles Wal-Marts today, said Robert McAdam, vice president of corporate communications.

Candice Choi, [phone]

candice.choi(at)dailynews.com

CAPTION(S):

2 photos

Photo:

(1 -- color) Lee Scott Jr., CEO of Wal-Mart, made an appearance Wednesday at the Panorama store as part of the chain's media blitz.

(2 -- color) An employee of Wal-Mart's Panorama City store speaks with CEO Lee Scott Jr. Scott will be visiting more stores today.

John McCoy/Staff Photographer