Could it be a reputation problem leading to Wal-Mart sales woes?

November 27, 2006

Wal-Mart has a reputation crisis on its hands (see previous posts on this). One question executives have to struggle with is, does it really matter? They tend to only get nervous about critics (especially online critics) when they see an impact on sales. And sales decreases tends to be a lagging indicator of a reputation crisis. Is this why Wal-Mart sales are weak this Christmas? Goodness they have done everything they can to lure in customers with even lower prices. (When businesses only have low prices to lure customers in, sooner or later they find diminishing returns along with diminishing margins).

Clearly, the lustre is gone, and the juggernaut that is/was Wal-Mart has been threatened. Advertising more low prices will not solve this problem. Sooner or later they are going to have to come to grips with the violations of societal values that lies at the heart of their reputation problems. Change, or begin to die.

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