More on Wal-Mart’s Declining Reputation

In a story out today about Wal-Mart’s declining reputation, the Morning News of Northwest Arkansas notes that admiration for the company is also falling sharply. Whereas Wal-Mart was once the most admired company in America according to Fortune magazine, the retailer is now barely in the top 20.

One expert called Wal-Mart’s poor reputation a “chronic” condition, as the retailer has repeatedly failed to take action on issues raised by activists and critics. Ignoring these complaints is not only inhumane, it’s a bad business strategy. Wal-Mart has years to go before it can even hope to begin regaining the trust of conscientious consumers.

Report: Wal-Mart Reputation Continues To Slide [NW Arkansas Morning News]

Wal-Mart Stores Inc. in 2007 continued to slip down a list of corporate reputation rankings, according to a survey.

The Bentonville-based retailer ranked No. 44 on the Harris Interactive report, which ranks the reputations of the country’s 60 “most visible” companies based on consumer perception surveys.

It was the third consecutive year Wal-Mart’s score on the list declined.

Wal-Mart’s slipped score was the also the third largest rating change, trailing behind Bank of America and Halliburton Co., which saw more significant declines in reputation scores.

Wal-Mart has similarly dropped down Fortune Magazine’s list of America’s most admired companies.

Wal-Mart in 2003 and 2004 was America’s No. 1 most admired company on Fortune Magazine’s list, but fell to No. 12 in 2005. The retailer in 2007 dropped to No. 19.

Wal-Mart isn’t too concerned with reports on its reputation.

“At a time when the public and Wal-Mart customers specifically are being pressed financially to make ends meet, we think the ultimate measure of reputation is sales,” said Greg Rossiter, a Wal-Mart spokesman. “Our sales over the last several months demonstrate pretty clearly that the public trusts Wal-Mart to help them save money to live better.”

The retailer has in recent years set out to be a better corporate citizen by incorporating health care and environmental sustainability initiatives into its business. But it may take time for the public to shift their perceptions of the retailer, said Sam Waltz, the director of Sam Waltz & Associates and a specialist in corporate reputational management.

“When there’s acute reputational damage that becomes chronic reputational damage, it becomes a very difficult thing to regain positive attributes,” Waltz said.

“In other words, it can take some time to get public credit for the good work Wal-Mart is doing now. It could take months and years because there’s people who look at them with a political paradigm and just do not want to give them credit.”

Nearly half of the American public surveyed said that companies need to address global social issues such as poverty, hunger and disease. Yet treatment of employees, including labor practices and human rights, continued to be a the most important measurement in evaluating a company, according to the report.

Harris Interactive, a Rochester, New York-based market research company, surveyed more than 20,000 people and asked them to rate on a point scale a company’s reputation on 20 attributes like vision and leadership, emotional appeal, financial performance and social responsibility.

Each survey participant is asked to rate one randomly selected company from the 60 included and each is given the option to rate a second company.

About 535 people rate each company.

Posted by Alex Goldschmidt on Tuesday, June 24, 2008

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