Could the retailer’s American woes spill across the border?
If Walmart’s smiley face icon was still around, it would have a black eye.
In the U.S., the company is taking a public beating as criticism grows over the “poverty” wages it pays employees. On Black Friday (Nov. 29), Walmart workers and their supporters are expected to protest at up to 1,500 stores, demanding better wages and more full-time positions.
The protests will be the culmination of two very bad weeks for Walmart. Last week, the retailer was in the headlines after a Walmart store in Canton, Ohio held a food drive for its own employees.
The story, which was picked up by multiple media outlets, sparked public outrage and spread like wildfire on social media, even launching a Twitter feud between Walmart and actor Ashton Kutcher, who has more than 15 million followers. While Walmart said the food drive was an “act of human kindness” taken out of context, it was viewed as proof that many employees can’t afford Thanksgiving dinner.
“In principle, [the food drive] is not a bad thing. Many companies have similar programs such as emergency funds if something awful happens,” said Paul Klein, president and founder of Impakt, a Toronto-based consultancy that focuses on social purpose. “But this can’t make up for the fact that [Walmart employees] are being paid inappropriately low wages to the point where they can’t have the most basic quality of life.”
Walmart Canada isn’t the target of any protests, since the labour issues between Canada and the U.S. are so different. “In the U.S., there’s a big public policy debate about the decline of the middle class and Walmart has been pulled into that because of their wage practices,” said Bruce Maclellan, president and CEO of Toronto-based Environics Communications. “The low minimum hourly wage is made even more difficult because of the lack of public health care. In Canada, we’ve got higher minimum wages and public health care, so employees have more support.”
Still, the negative publicity could impact Walmart’s reputation on this side of the border. “There’s spillover for sure, especially among a certain minority segment of the population that is concerned about labour issues, fairness and corporate social responsibility,” said Maclellan.
Walmart has spent the past few years trying to polish its image. Since 2006, for example, it made a big push into environmental sustainability, reducing greenhouse emissions and requiring suppliers to reduce packaging, among other things.
But even those efforts—while undoubtedly having a huge impact on the environment—are viewed with skepticism. “The reason they’re reducing environmental impact is because it saves them money,” said Klein. “When everything you do is ultimately based on helping consumers save money, then everything is looked at through a lens of cost reduction. Everything… including its employees.”
Maclellan said Walmart’s good work will be eclipsed by the strong opposition to its labour practices. The company’s reputation management challenge now is to make sure the opposition doesn’t keep growing. “There’s definitely a conflict at Walmart between profit maximization and good corporate citizenship,” he said. “And they’ve got to reconcile how they can bring those two into some greater alignment because they appear to be bleeding on the corporate social responsibility side.”
Walmart also needs to inject greater sincerity into its communications, said Maclellan, particularly its website TheRealWalmart.com, which launched in May. The website features questions like “What is Walmart’s impact on the community?” with glowing, polished answers. Walmart should make the website “more candid, unvarnished and more interactive, so people can ask what they are really thinking,” said Maclellan.
“It’s also interesting that they chose to put all of their messages on a standalone site, so if you go to Walmart.com or Walmart.ca, it’s very hard to find any answers about these issues,” he added. “In fact, if you type in ‘corporate social responsibility’ in the search bar, you get a bunch of products for sale, including [the documentary] Super Size Me. So they don’t make it easy for consumers visiting their site to get real answers about real issues.”
