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2007-11-12
Washington, D.C. Wal-Mart's Reputation Among Consumers Continues To Decline

It looks like Wal-Mart's low prices aren't the only thing falling at the corporate chain. Consumer opinion of the company continues to fall lower as well. A new national survey released today by Wal-Mart Watch shows that more consumers today have a negative opinion of Wal-Mart than in past surveys. In the spring of 2005, Wal-Mart Watch began a nationwide public-education campaign to challenge the world's largest retailer to become a better employer, neighbor and corporate citizen. Since then, Wal-Mart Watch has conducted periodic public opinion studies to track consumer perceptions of Wal-Mart. The October 2007 study released today -- a national survey of consumers, and a series of focus group discussions with consumers representing key growth segments for Wal-Mart -- takes a closer look at the factors that may be affecting Wal-Mart's weakening sales, including consumers' inclination to make "across the aisle" purchases at Wal-Mart and perceptions of Wal-Mart's new ad campaign. The key findings of the October 2007 survey "demonstrate that Wal-Mart's standing among consumers continues to decline," Wal-Mart Watch said. The survey found that: 28% of all consumers (and 23% of regular Wal-Mart shoppers) report developing a more negative opinion of the company over the past year - more than twice the percentage who report more negative perceptions of Target over the same period of time (10%); The percentage who says they are likely to shop at Wal-Mart in the next 6 months
has fallen off sharply since March (from 69% to 60%); Target's relative position has grown stronger. Since 2005, Target's overall favorability rating has increased by 6 points, from 73% to 79%, while Wal-Mart's favorability has remained in the mid-70's; Resistance to shopping at Wal-Mart among growth segments and reluctance to shopping at Wal-Mart more often among Wal-Mart's current base of regular shoppers is increasingly tied to concerns about the retail giant's business/labor practices; Since March of this year, regular Wal-Mart shoppers are more likely to say they have bought/shopped less at Wal-Mart because of what they've heard about the company's business and labor practices - 16% say they've shopped at Wal-Mart less often (compared to 11% in March) and 11% report buying less at Wal-Mart (compared to 9% in March); Among rare/non-Wal-Mart shoppers, the number one factor in consumers' resistance to shopping at Wal-Mart is the company's policies (41%). Other considerations, like store proximity (21%) and economic constraints (8%), are considered to be much less relevant; When prompted, 81% of rare/non-shoppers cited key Wal-Mart policies (treatment of employees; impact on community) as relevant to their decision to avoid shopping at Wal-Mart; Regular Wal-Mart shoppers as well as growth segments (infrequent women shoppers; infrequent shoppers with household incomes over $50k) want substantive change at Wal-Mart - and will reward the company if it does so; 62% of consumers - and 64% of regular Wal-Mart shoppers - endorse the statement that "As the largest employer in the United States, Wal-Mart should be held to a higher standard than other stores in terms of how it treats its workers;" 64% of consumers (and 66% of regular Wal-Mart shoppers) say they would be more likely to shop at Wal-Mart if the company "bought more products made in the United States;" 55% of consumers (and 58% of regular Wal-Mart shoppers) say they would be more likely to shop at Wal-Mart if the company "required its suppliers in China to have better safety standards;" 54% of consumers (and 51% of regular Wal-Mart shoppers) say they would be more likely to shop at Wal-Mart if the company "improved its business and labor practices." Wal-Mart Watch also concluded that "In this context, Wal-Mart's new ad campaign, with the tagline 'Wal-Mart Saves the Average Family $2,500 per year' is not likely to be persuasive." Just 4% of all consumers - and 4% of current Wal-Mart shoppers - estimate that shopping at Wal-Mart saves the average family more than $2,000 per year. Wal-Mart shoppers are most likely to believe that real savings number is in the $100 to $500 per year range. The ads' other premise - that those who save money at Wal-Mart can use the savings for leisure activities or major purchases - is also not shared by consumers. The majority of Wal-Mart shoppers (and non-shoppers) believe that the average shopper is most likely to use their savings to pay for basic necessities (like food or utilities) or pay off credit card debt.


What you can do: The Wal-Mart Watch survey was conducted October 26 through 30, 2007 among a national random sample of 1,004 adults, age 18 and older (margin of error, /- 3.1%). The study was conducted by telephone and respondents were drawn from a random digit dial sample which gives every household an equal chance of being called. All respondents were screened to ensure that they were currently 18 years or older. The previous national survey findings were conducted using identical methodology. The October/November 2005 Survey was conducted October 27 through November 3, 2005 among 1,200 adults, 18 (margin of error, /- 2.8%). The February 2006 Survey was conducted February 2 through 8, 2006 among 500 adults, 18 (margin of error, /-4.4%). The March 2007 Survey was conducted February 28 through March 4, 2007 among 1,000 adults, 18 (margin of error, /- 3.1%). The findings were also informed by a series of six focus groups, conducted October 9 through 12, 2007 - 3 in Detroit, MI and 3 in Ventura, CA. Each group contained a randomly selected sample of women with $50k in annual household income, who are infrequent Wal-Mart shoppers. Consumers in each group varied in terms of partisan affiliation, profession, age, and background. It is important to note that, although the groups lend valuable insight into consumers' opinions and perceptions, the groups should not be considered to be representative of Wal-Mart's growth segments (or any other specific segment of consumers); they simply reflect the perceptions and attitudes of the consumers who participated in the groups. For more background go to www.walmartwatch.com.










 
 
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