It’s been a slippery slope down for Wal-Mart on what Fortune magazine calls its “definitive report card on corporate reputations.” On February 22, 2006, Sprawl-Busters reported that the Fortune magazine list of 100 “Most Admired” companies had bumped Wal-Mart’s fortunes from #1 on the Most Admired Companies list in 2003, to #4 in 2005, and further down the rope to #12 by 2006. The new list for 2007 has just been released by Fortune, and Wal-Mart has continued its 4 year free-fall. This month’s ranking puts Wal-Mart Stores, Inc tied at #19 with Pepsico. In the specific category of General Merchandisers, Wal-Mart ranked number 8, behind many of its arch-rivals, in the following order from the top: Nordstrom, Target, JC Penney, Federated Department Stores, Sears, Saks, Kohl’s, and Wal-Mart. The world’s largest retailer was ranked by “eight key attributes of reputation,” including innovation, people management, quality of products/services, and financial soundness. Wal-Mart scored best on financial soundness, but fared poorly on people management, social responsibility and quality of products. We noted last year that Wal-Mart had the distinction of being the only company to disappear from the Top 10 Most Admired list entirely. The Fortune Most Admired list is based on a survey of 10,000 executives, directors and securities analysts. They are asked which ten companies they admire the most. So this is really a “Most Admired on Wall Street” list, and hardly an accurate view of the public verdict against Wal-Mart. In the past, Wal-Mart has boasted of its Fortune ratings. In its 2001 Annual Report, Wal-Mart CEO Lee Scott noted that his company was #3 on the Fortune Most Admired list, and in their 2002 Annual Report, Scott wrote, “This is the tenth time in the last 20 years that we ranked in the top 10.” So Wal-Mart takes these lists very seriously. Those halcyon days are over, and Wal-Mart is just barely hanging in the top 20 list. Repeatedly suffering from headline shock in the media, Wal-Mart’s reputation continues to nosedive — even in this kind of a Wall Street executive’s ranking. “By most mreasures,” Fortune wrote, “the retail giant had rotten year.” The magazine pointed to the company’s “string of PR disasters.” This lastest Fortune poll is just the latest of such disasters.
In the near future, Fortune will also release its “100 Best Places to Work” list, and it’s entirely possible that Wal-Mart will not be on the list. That’s because the “Best Places to Work” list is based on rankings from actual employees, not executives and CEOs. Wal-Mart used to be in the 100 Best Places to Work, but last year disappeared. In 2002, Lee Scott noted in his message to shareholders, “We have now earned a place on this list in four of the last five years.” The embarrassment of falling out of the top 100 Best Places to Work, combined with the slide off the top 10 Most Admired, leaves Wal-Mart today a less desirable place to work, and a less admired corporation. It’s safe to say that this is one story you won’t find in the company’s 2008 Annual Report. Even Wall Street has gotten the message from community activists and organized labor: this is a company built on exploitation, that devalues its workers and degrades its host communities. Reputation is one product even Wal-Mart’s money can’t buy.
