Walmart (WMT) announced a plan to restrict the sale of some guns in their stores — a bold move — after the mass shooting at its El Paso, Texas store. But does aligning corporate policy with social issues alienate customers and spell disaster for companies?
“Companies more and more are expected to express their values through their business decisions — this is something that customers want, this is something that employees want and I think that’s what Walmart is aiming to do here,” said Aaron Cramer, president and CEO of nonprofit BSR, in an interview with Yahoo Finance’s On The Move. “Walmart will please some of its customers and alienate some of its customers.”
Gun safety in America is a particularly contentious issue and “polarizing” as it’s directly linked to the Constitution, said Cramer, a consultant who helps companies navigate social issues. The National Rifle Association also has a tremendous amount of power, long dominating the conversation about guns.
But Cramer notes that not only did Walmart stop selling ammunition used for handguns, military-style weapons, and handguns, it also discouraged people from carrying weapons in its stores and also called on Congress to do something about it. Shortly after Walmart’s announcement, Kroger (KR) and Walgreens Boots Alliance (WBA) followed suit asking customers not to bring guns into its stores. And it doesn’t look like it will stop there.
“We’re going to see more businesses do this,” said Cramer. “Dick’s (DKS), Gillette, (PG) Unilever, (UL), Nike, (NKE), these are all companies that have aimed to align their products and also their marketing practices with a changing set of social expectations and they have derived business benefit from those decisions.”
In its 2018 annual survey of the American public’s priorities for just business practices, nonprofit JUST Capital found that a strong majority of the public, 63%, believes CEOs have a responsibility to take a stand on important societal issues. More than four in 10 Americans believe leaders should take a stand no matter the issue – even if it doesn’t matter to their business.
Cramer said he thinks we’re seeing a changing mindset in Corporate America and that more companies will make changes based on values. And while shareholders may get hung up on day-to-day stock fluctuations during initial changes, Cramer said looking at the daily value of a stock is short-sighted when determining the overall long-term impact of a shift in business strategy.
Walmart “is acting on the basis of its values that’s something that should provide an abiding value to the company,” Cramer said.
Yvette Killian is a producer for Yahoo Finance’s On The Move.