Study: The “Better” Walmarts Are In Higher-Income, Whiter Areas

Image courtesy of Will

All Walmarts are, bluntly, not created equal. Some have better customer service than others and are just plain more pleasant shopping experiences. And if you’ve felt like the Walmarts in richer ZIP codes are more likely to be the nicer ones, well, one study says you’re right.

A study published this year took a look at Walmart customer satisfaction by analyzing the 35,000 total Yelp reviews for all Walmarts nationwide. And the trend the researcher found is… disquieting.

The reviews covered a total of 2.840 stores. Among them, the study found, reviews for stores in areas with a lower average income were significantly worse than reviews for stores in areas with higher incomes.

And worse: even controlling for average area income, the higher the percentage of black or Latino residents in a certain ZIP code, the worse a Walmart there would rate.

The researcher running the study didn’t just look at the numerical ratings stores got; he also looked at the words reviewers were using to describe them. Stores in areas with predominantly black residents tended to be “negative,” “nasty,” “terrible,” “unorganized,” and, mainly, “worst.” Stores in areas with mostly white residents tended to be “friendly,” “typical,” “clean,” and even “pleasant” or “amazing.”

Now, it seems incredibly unlikely that anyone at Walmart is actually sitting around twirling their handlebar moustache and trying to figure out how to make life miserable for low-income or minority customers on purpose. Still, the trend in the data is there — so what’s going on?

The researcher who conducted the study points to chronic understaffing and poor working conditions as probably causing the poorer service. In a series of interviews, he and his student-assistants talked to 89 Walmart workers around the country. Employees across the board reported a lack of support, but it seemed “particularly acute,” he writes, for employees working in low-income communities of color.

And all of that — Walmart’s ability to cut corners and generally suck while still drawing in customers — is tied to competition, the researcher suggests, or specifically, the lack of it.

Walmart is able to compete so aggressively on price that it drives other retailers out of an area and establish a local monopoly, the researcher suggests. It’s called a “monopsony”:

“Instead of raising prices and lowering product quality and quantity to increase profits, profits are increased by lowering wages and staffing levels, worker effort, and employee retention. All companies trade-off lower turnover and effort for lower wages; Walmart is distinct for the extent to which it has chosen a strategy in which low-wage workers do not stay very long, do not invest much effort, but are paid such low wages that Walmart is still making a profit.”

Walmart, of course, thinks the study is bunk. In a statement to Business Insider, a spokesperson for Walmart called it “flawed and without merit.”

“Our customer traffic and overall customer satisfaction scores have been improving and we’re focused on continuing to do better,” the representative told BI, tacitly acknowledging that the company has some pretty serious customer satisfaction problems overall.

The statement continued: “Our associates play a critical role in the company’s success and that’s why we’ve invested $2.7 billion on associate education, training and wages. We’re also proud to provide communities across the country, regardless of social or economic background, access to affordable goods and career opportunities to help them better provide for their families.”

And, as BI points out, the study itself may be flawed: using Yelp alone, though it generated a fairly high sample of reviews, can’t account for other biases or outside influences. The Yelp-using population may not be representative of the broader population, or it may be predisposed to perceive any store in a ZIP code mainly populated by people of color as low-quality, regardless of the reality.

On the other hand, the Yelp reviewers aren’t the first to notice a significant absence of staff at Walmart stores, either: staff cutbacks have led to increased crime across the board at Walmart locations.

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walmart’s consumer redlining [Contexts]
A study reveals a disturbing trend about Walmart locations across the US [Business Insider]