The worst Walmarts are located in low-income, minority communities.
That’s according to a study published in May by Contexts, a quarterly publication of the American Sociological Association. A Walmart store’s location is closely related to how good or bad the store’s customer service is, the study found.
The study, which was recently highlighted by The Atlantic’s City Lab, evaluated customer service by analysing the Yelp reviews of Walmart 2,840 locations across the US.
Stores in areas that have lower average incomes have significantly worse customer reviews than locations in higher-income zip codes. Additionally, locations in areas with higher proportions of Black or Latino residents have worse reviews than those in areas with more white residents.
The study’s author Adam Reich, an assistant professor of sociology at Columbia University, analysed approximately 35,000 reviews of Walmart locations and found that there was a consistent correlation between both race and class and a location’s Yelp reviews. Reich blames the disparity on
Walmart’s decision to under-staff stores in certain areas.
In the early 2000s, Walmart implemented cost-cutting policies that reduced the number of necessary employees per store and resulted in a drop in store quality. This study provides evidence that a decrease in store quality was not consistent across the board, but instead impacted some customers more than others.
“Walmart is the largest retailer and largest employer in the world; moreover, it has consciously branded itself as a champion of and boon for disadvantaged communities,” writes Reich. “Its underinvestment in these communities is thus particularly notable.”
Walmart did not immediately respond to a request for comment.
The study may have a few holes. The reliance on Yelp means that researchers can’t examine reviewers’ biases and outside influences. For example, a store’s location in a lower-income or more predominantly Black or Latino neighbourhood may impact how its quality is perceived by some reviewers, regardless of the store’s customer service.
However, this isn’t the first time that Walmart’s apparent understaffing has been called into question.
Reports of Walmart saving money by cutting staff have also gotten the retailer in hot water with police. Earlier in August, Bloomberg reported that more than 200 violent crimes had been committed so far this year at Walmart locations across the US.
Bloomberg argued that the rise in crime is a result of corporate policies. Cost-cutting policies that started in the early 2000s resulted in a drop in store quality, while the loss of greeters and the rise of self-checkout scanners made shoplifting and other illegal activities easier to engage in without employees noticing.
“In the coming weeks and months, we will continue our increased outreach to law enforcement across the country, as part of our ongoing commitment to meet our customer’s and associate’s expectations of a safe and enjoyable shopping experience,” a Walmart representative said in an email to Business Insider.
While Walmart’s cost-cutting policies have had negative — and, at times, dangerous — outcomes for customers, they have also driven profits: Bloomberg found that sales per employee in the US grew 23% in the last decade to $236,804.
Currently, Reich states that the retailer can turn a profit despite providing poor customer service because Walmart’s super low prices have helped put local competition out of business. As a result, Walmart becomes some customers’ only option — no matter how poor the shopping experience is.
However, Reich argues that the retailer may suffer in the long term if it doesn’t make some major changes. A poor shopping experience could be increasingly damaging for the brand as online shopping grows and competitors increasingly invest in providing quality in-store experiences.
“For Walmart and other retailers, providing a pleasant customer service experience seems likely to be increasingly important to corporate profitability,” writes Reich. “For its own sake, then, Walmart should hire more employees, particularly at stores in low-income communities of colour, and give all Walmart employees more reasons to smile through better wages and working conditions.”
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