Wal-Mart’s reputation continues to proceed it. The group Wal-Mart Watch this week commented on two new reports that indicate sale may be u at Wal-Mart, but reputation is falling. Wal-Mart’s reputation continues to decline, Wal-Mart Watch says, primarily
because of the company’s poor business practices. Wal-Mart’s reputation remains the biggest obstacle to the company’s long-term growth potential. Wal-Mart is already the largest corporation in the world, with more than two million employees. In order to further increase sales the company must either sell more products to existing customers or identify new ones. Wal-Mart’s reputation affects both its ability to reach new shoppers and to build new stores. “There’s no doubt that Wal-Mart is profiting from the economic downturn and cash-strapped consumers,” said David Nassar, Wal-Mart Watch Executive Director. “But, recent public opinion surveys indicate that although people are shopping there, they aren’t happy about it because they are still concerned about Wal-Mart’s
poor business practices.” In the past two weeks alone, Wal-Mart received failing marks on two different scales of corporate trustworthiness and likeability. The two surveys – from Harris Interactive and the Reputation Institute – indicate shoppers don’t trust Wal-Mart, in spite of the retailer’s massive marketing overhaul. These results support Wal-Mart Watch’s fall 2007 public opinion poll findings. The Harris Interactive survey found that shoppers consider a company’s labor practices above all other social responsibility issues. Considering that Wal-Mart has done little to improve working conditions in its U.S. stores, refuses to raise wages and continues to provide a substandard health care plan for its employees, it is not surprising the retailer ranked so low on Harris’ list. Meanwhile, the Reputation Institute ranked the 150 largest U.S. companies based on “the overall trust, esteem, admiration and good feelings consumers have toward them.” Wal-Mart, long known for damaging communities, sourcing from sweatshops and discriminating against female employees, came in at number 136 out of 150 companies, dropping 76 places from number 57 in 2007. Wal-Mart was joined in the bottom 15 by several oil companies and defense contractors, including Halliburton. High profile cases also continue to draw negative attention and damage the company’s reputation. In March, for example, Wal-Mart’s unconscionable treatment of former employee Debbie Shank sparked national outrage and earned the company Keith Olbermann’s “Worst Person in the World” designation for three nights in a row on MSNBC’s Countdown. Just two weeks ago, Wal-Mart made headlines again for violating labor laws two million times in Minnesota, and faces up to $2 billion in damages. Wal-Mart has its hands full doing damage control from such stories.
Wal-Mart Watch says Wal-Mart’s efforts to re-image itself, with a new logo, and new corporate slogan, has not been enough to prevent its reputation woes. “So despite the millions of dollars Wal-Mart spends to improve its image, these negative public opinion surveys and headlines combined with opposition to new Wal-Mart stores in communities across the country clearly show that Wal-Mart’s reputation problems are not resolved,” said Nassar. “If Wal-Mart wants to retain shoppers after the economy improves, it will need more than a new logo or advertising campaign. The company needs to change its business practices; it can start by treating its employees fairly, paying higher wages and providing adequate health care plans.” For a copy of the Harris Interactive Survey go to http://walmartwatch.com/img/documents/harris_interactive_report.pdf and for a copy of the Reputation Institute Report go to: http://reputationinstitute.com/events/US_Retail_Industry_Results-Global_Pulse_08.pdf. To review Wal-Mart Watch’s survey from 2007, go to http://walmartwatch.com/img/blog/polling_summary.pdf