Walmart Inc Wins by Taking Stands on Social Issues

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Walmart stock - Walmart Inc Wins by Taking Stands on Social Issues

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It remains to be seen just how much political correctness really matters to existing and potential Walmart Inc (NYSE:WMT) customers. But, to the extent shoppers really care, owners of Walmart stock can take a little comfort in the fact that the world’s biggest retailer just turned its sensitivity dial up a notch.

How’s that? It’s removing Cosmopolitan magazine from its checkout aisles, as they — even just the cover — have become too sexualized.

Cosmo will still be available in the stores’ larger magazine and book area, so it’s not as if Walmart has drawn a hard and fast line deep in the other team’s side of the field, so to speak. But, the small gesture is actually a huge gesture of goodwill with a wide swath of the country’s consumers.

Walmart Takes Stand on Issues

Truth be told, had Walmart not felt a little pressure from the National Center on Sexual Exploitation, it may never have even thought about the matter. The fact that it’s at least listening to advocacy groups, however, implies that it’s aware consumers are expecting it to take stands on social issues.

Not that Walmart isn’t at least partially hedging its bet. A comment from a company spokesperson explained the retailer “will continue to offer Cosmopolitan to customers that wish to purchase the magazine, but it will no longer be located in the checkout aisles.” That same message further said, “While this was primarily a business decision, the concerns raised were heard.”

It’s not the first concern Walmart has heard of late, directly or indirectly. In the wake of the death of 17 high school students in Parkland, Florida in mid-February, at the hands of a 19-year-old gunman, Walmar,t along with Dicks Sporting Goods Inc (NYSE:DKS), raised its minimum age to purchase a firearm from 18 to 21.

And most recently, Walmart asked its Chinese suppliers to cut the amount of carbon dioxide they produce each year by a collective total of 50 million tons by 2030. It’s a non-binding and largely difficult-to-measure request, but the fact that Walmart is thinking about such matters at all is telling.

Survey Shows Positives for Walmart Stock

While it would be misleading to suggest shoppers who affiliate with the Democratic Party care more about the environment or gun safety (or sexual exploitation, for that matter) than Republican consumers do, it’s not quite a stretch to say Democrats are more apt to steer clear of a business for principle-based reasons than the average conservative Republican is.

There’s a change brewing, however, that current and prospective Walmart stock holders have to like. An ongoing survey taken by YouGov more or less says so. In its latest poll asking consumers from both major parties how likely they were to shop at Walmart, five years ago only 44% of Democrats said they were likely to step foot in a Walmart store. Now that number is 52%.

Republican Party members willing and likely to shop at Walmart stands at 65%, as it did five years ago.

It wouldn’t be realistic to call it a sudden change of heart for consumers who tend to find themselves on the left side of social issues. All major change is gradual, and Walmart has been working for several years to shore up its sore spots with shopper-citizens. Namely, it’s been working to increase employee wages to a level that’s at least livable.

On the other hand, it would be naive to think that in the current politically and socially-charged environment that a wide swath of consumers from both sides of the aisle aren’t taking note of the little things.

Looking Ahead for Walmart Stock

Such initiatives — even something as minor as moving a magazine’s location in a store — may seem apropos, and in most regards it’s a benign move that won’t change the company’s fortune much either way. There is a risk of over-responding to social pressures though.

Case in point? The 2016 decision from Target Corporation (NYSE:TGT) to allow transgender shoppers to use whichever bathroom or fitting room they’re most comfortable with. Regardless of the right/wrong argument, there’s no debate that millions of consumers have taken a strong stand against the decision by forming a well-organized boycott effort.

It’s difficult to protest the location of a magazine that the retailer still sells, and it’s even difficult to argue that asking suppliers to reduce their carbon dioxide emissions is a bad thing. Walmart and Dick’s have already felt a pushback from some members of the gun owner community though, facing a lawsuit from a 20-year old would-be buyer who’s claiming age discrimination.

It’s a relatively weak legal argument, but it does demonstrate that not all decisions are respected or appreciated. The biggest fear owners of Walmart stock should have here is the company realizing the benefits of political correctness, and then pushing those limits beyond their actual boundaries.

So far though, Walmart seems to have found a reasonable balance between “too far” and “not far enough.”

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.


Article printed from InvestorPlace Media, https://investorplace.com/2018/04/walmart-inc-wmt-stock-wins-taking-stands-social-issues/.

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