Walmart backs out of deal

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Walmart publci relations

Walmart public relations have been bounding up and down in recent weeks. From announcements of across the board raises to store closings to new stores being opened, it’s tough to pin down where the brand is at the moment. But a recent announcement might have public sentiment heading down again.

Walmart had promised to build two stores in Washington DC, an area of the city that is predominantly black. According to the most recent U.S. census, the residents of Ward 7 are more than 95 percent African-American, with a median household income of about $35,000. Residents of the relatively poor area were excited about getting not one but two Walmart stores. That would mean more jobs and cheaper goods in a notoriously expensive city.

Walmart even went so far as to sign leases and begin construction. Now the company has announced it will halt construction. No Walmarts for Ward 7 after all.

Councilwoman Yvette Alexander, who represents this district, told various news agencies she was very angry. “I take this personally as I advocated to bring them to Ward 7,” Alexander said. “This has racial and social-economic discrimination implications.”

Now, to be fair, Walmart is closing hundreds of stores. They may just want to avoid building a store in that area while they shore up their finances. But that won’t matter to those who see this as corporate greed spiced with old-fashioned racism.

The reasons for this go back to a 2012 agreement in which, Alexander says, Walmart agreed not to build any other stores in DC unless they built the promised locations in Ward 7. Since opting to stop construction on those stores, Walmart built three other stores in other areas of DC. Richer, whiter areas. So, fair or not, these facts give upset folks all the ammunition they need to push this narrative forward.

At this point, the last thing Walmart needs is angry lower-income consumers, particularly African-American consumers who have already proven they are willing to take a stand against actions perceived as tinged with racism.

To help stave off this potential PR problem, Walmart addressed the allegations directly.

“As part of this review, we’ve concluded opening two additional stores in the district is not viable. Our agreement with the district to build stores was contingent upon business conditions,” Walmart said in a statement. “We share in the disappointment about this reality, but our existing three stores are not profitable, and we must focus on improving them so we can take care of our customers and associates.”

Will “shared disappointment” be enough to keep this decision from impacting Walmart’s overall PR? It will be interesting to watch this all play out.

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