Labour Issues at Heart of Walmart’s Reputational Problems

Earlier this week, Dutch pension fund PGGM Vermogensbeheer B.V announced that they would cease investment in US retail giant Walmart, citing the company’s failure to engage with their concerns, particularly over labour issues. Two years ago, GlobeScan examined the public’s perceptions of Walmart and found that it was cited as socially irresponsible by many more than described it as responsible.
In 2013, that trust deficit persists. When asked, unprompted, to name a socially responsible company, 2 percent cited Walmart, whereas 9 percent of Americans (and 8% of Canadians) had the company top-of-mind as being socially irresponsible. In a similar vein, when asked to name the company they most distrust, 11 percent of Americans named Walmart. It may be the least favourably perceived company operating in North America today.
When we look at the reasons people say they distrust Walmart, the issue of employees looms large. Though we identified perceptions of Walmart’s employee treatment as its weak point two years ago, it appears the public sees the company as no closer to resolving those issues, with “employees” dominating in the word cloud shown above.

However, it is not all bad news for the company: when we examine our survey of sustainability experts (GSS), we see a significant proportion (8%) view Walmart as a leader in integrating sustainability into business strategy. Tellingly, none focus on Walmart’s relations with its staff. Instead, Walmart’s supply chain efforts come to the fore in the word cloud analysis.
Walmart’s laudable work around supply chains, however, is not gaining wider public recognition—and as long as perceptions continue to be shaped by employee treatment, the company risks erosion of its market share. Indeed, 38 percent of Americans say they have punished socially irresponsible companies in the last year, either by shopping elsewhere or criticizing them in conversation with friends and family. In 2013 it is apparent that the onus is on Walmart to radically shift perceptions of its treatment of employees. While “farm to shelf” supply chain assessments are rightly praised by sustainability leaders, a failure to address employee issues risks undermining all such efforts and, with them, Walmart’s market position.