Wal-Mart's greatest buffer against its critics is the size and loyalty of its customer base. For years Wal-Mart has built a reputation for treating its core customers with friendliness and respect.
But today that reputation is in jeopardy. And one reason is a decision Wal-Mart made a year ago: to quit offering layaway.
MSNBC's Allison Linn examines the effect of this decision on some customers here. See the flip for some interesting excerpts.
Here's how one customer felt about the decision, and how she feels about Wal-Mart today:
The move is especially jarring to some families because it has come amid other changes Wal-Mart has made, including cutting back on fabric departments and stocking more trendy clothes, as the discounting titan tries to appeal to a broader swath of shoppers, including more upscale consumers. Those changes, some longtime shoppers say, has made them feel like the store is less interested in catering to its traditional and loyal market of family shoppers on tight budgets.
"I always believed that they’re always trying to give us the lowest prices and they’re not for the rich man, you know?" said Jennifer Reynolds, a 28-year-old mother of four who used to depend on layaway for her children’s school uniforms and holiday gifts. "I just can’t believe that they would get rid of layaway and say, ‘Here, well, here’s a credit card.’ "
I can't speak for anyone else, but layaway is a much bigger business than I realized:
Patricia Edwards, an analyst with investment firm Wentworth, Hauser and Violich who owns shares in Wal-Mart, remembers visiting a Wal-Mart on the day after Thanksgiving a couple years ago and being surprised to see that the longest line in the store was for the layaway department.
What happens when customers question their loyalty? They shop around.
Reynolds, who lives on the military base in Fort Hood, Texas, said she still shops at Wal-Mart about once a week, but she’s stopped doing her grocery shopping there and also has noticed that some other items are now cheaper elsewhere.
That's huge. Because once customers start questioning the validity of your slogan ("Always the low price. Always"), you've got some trust issues that won't resolve themselves.
We may not be talking about the beginning of the end--but it might be the end of the beginning.