Walmart Nabs Good PR With Veteran Hiring, 'Buy American' Efforts

Moves Come After Months of Negative News Over Bribing, Black Friday

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After having been pounded by negative coverage since April for everything from allegedly bribing Mexican officials to its employees supposedly staging a wildcat Black Friday strike, Walmart generated some favorable coverage today by promising to hire veterans and buy more products made in the U.S.

Walmart highlighted job creation, for veterans and buy buying from American suppliers.
Walmart highlighted job creation, for veterans and buy buying from American suppliers.

But data from social-media and consumer surveys suggest Walmart will need a lot more good days to counter the impact from months of unfavorable publicity, which have driven down the retail behemoth's favorability metrics.

In a speech to the National Retail Federation annual convention, previewed by a story in The New York Times, Walmart U.S. CEO Bill Simon said the retailer is pledging to hire any honorably discharged veteran who wants a job -- starting on Memorial Day. Mr. Simon also told the NRF that Walmart will buy an additional $50 billion in U.S.-made merchandise over the next 10 years.

The social-media buzz around those things was favorable. As of 3 p.m. E.S.T, 69% of people commenting on the veteran hiring saw it as positive, according to Infegy's Social Radar monitoring and analytics system.

But at only 4.5% of the conversation around Walmart today, the veteran hiring issue was low by historical standards for news affecting the retailer, said Infegy CEO Justin Graves. The "Buy America" pledge only came up in 0.3% of Walmart social-media conversations today.

By comparison, when allegations of senior executives ignoring bribery in Mexico were reported in The New York Times in April, that story cropped up in 23% of social-media conversations about Walmart that day. Those conversations were 43% negative toward Walmart, according to Social Radar.

The nationwide "strike" against Walmart on Black Friday, backed by the United Food and Commercial Workers Union, peaked at 21% of Walmart social-media mentions on Nov. 21 in the run up to the crucial shopping day. Negative strike-related sentiment toward Walmart peaked at 50% of conversations on Nov. 26, the Cyber Monday after Black Friday, according to Infegy.

For its part, Walmart has said demonstrations occurred at only 26 stores nationwide and involved fewer than 50 of its own associates, while the retailer posted record Black Friday sales.

The spate of negative news, which also included reports that Walmart led retail opposition to paying for improved fire safety at Bangladeshi suppliers prior to a fatal fire at an apparel factory there in December, appears to have taken a toll on the brand.

The Mexican bribery allegation buzz was short lived and had died out by May, said Infegy's Mr. Graves. Yet with 26% overall negative social-media sentiment last year, Walmart was well ahead of key competitors Target (8%) and Amazon (12%) in that regard, per Social Radar.

YouGov, which measures consumer sentiment using tracking polls, found that the 12-week moving average for the net number of people ages 18 and over who report having heard positive vs. negative buzz about Walmart fell to 9% today from 15% a year ago.

Still, on some other potentially more important business considerations, Walmart is doing better. A net 30% of consumers say Walmart provides good value today, vs. 29% a year ago. While a net 9% more people would be embarrassed to say they work for Walmart today, according to YouGov, that's better than the negative 17% on that metric a year ago. And the net favorable impression of the brand stands at 17% today vs. 16% a year ago.

On a most crucial metric -- sales -- Walmart is definitely doing better, having reported positive same-store sales in the U.S. the past three quarters after two years of declines. And the stock is up 15% in the past year after breaking out of a 15-year trading range.

The veteran hiring and "Buy American" issues are more likely to resonate with Walmart's core consumers than some of its prior positive communications efforts around sustainability, said Gene Grabowski, exec VP of crisis and issues management firm Levick. That's not to say the sustainability issue isn't important to Walmart executives or to policy makers, influencers and potential critics, and hence also important, Mr. Grabowski said.

In an email, Mr. Tovar said Mr. Simon's "commitments were made because they are good business and the right thing to do," rather than an effort to generate better media coverage by changing the message or the subject for Walmart.

Both themes also address long-time criticism of Walmart for how it treats employees and how much of its goods come from overseas, particularly China.

In his speech, Mr. Simon highlighted job creation -- both for veterans at Walmart and through buying more from U.S. suppliers through a recently appointed team assigned to do just that, though he said two-thirds of Walmart's products already come from the U.S. He also took issue with the negative image for retail jobs generally, noting that 75% of Walmart managers started as hourly associates.

The renewal of the "Buy American" theme, once prevalent in the 1990s under founder Sam Walton and before the retailer had expanded overseas, has been discussed within Walmart for more than a year, according to people close to the company. A key driver is that people making products in the U.S. are likely to buy more from Walmart.

Some investments made in Asian factories in recent decades "are nearing the end of their useful lives," Mr. Simon said. "Oil and transportation costs are high and increasingly uncertain. ... A few manufacturers have even told Walmart privately that they have defined the 'tipping points' at which manufacturing abroad will no longer make sense for them. Let's give them the nudge they need. Through our buying power, we can give manufacturers confidence to invest capial here -- and play a role in revitalizing the communities we serve." It's music to the ears at Made Movement, the Boulder, Colo., agency started by former Crispin Porter & Bogusky executives around a theme of encouraging U.S. manufacturing.

"It's really easy to vilify Walmart, and I'm sure there will be people all over the place who cry hypocrisy," said Dave Schiff, partner and chief creative officer of Made Movement. "I look at them as Darth Vader and when the mask comes off, it's a benevolent old guy."

Bu,t he said, "Walmart, for better or worse, is a massive engine for change," for example by requiring trucks delivering to its warehouses to meet minimum fuel efficiency standards.

"This makes sense for them because consumers want this," Mr. Schiff said."There are other things attached to it, like a smaller carbon footprint, fair labor practices and job creation."

Though the company and stock have been doing better this year, "The bad press has hurt them," said Consumer Edge Research analyst Stacie Rabinowitz, in part because it's been a distraction for management and investors alike. But she said today's initiatives go beyond good press or "greenwashing" by also having components that she believes could improve Walmart's efficiency and sales.

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