In the financial markets there is no question that Wal-Mart Stores rules. Now, a new survey shows that it is held in high esteem by retail executives. A new study of attitudes by 400 execs and 55 Wall Street analysts, show that both groups admire Wal-Mart above all others. Both groups also agreed that Ames Department Stores, now in bankruptcy, ranks the lowest. In between there was little agreement.
| Firm | Strength rating | Description |
|---|---|---|
| Wal-Mart (WMT) | AA | high quality |
| Costco (COST) | A | upper medium quality |
| Target (TGT) | A | upper medium quality |
| Federated (FD) | BBB | medium quality |
| Kohl's (KSS) | BBB | medium quality |
| May (MAY) | BBB | medium quality |
| Sears (S) | BBB | medium quality |
| BJ's (BJ) | BB | lower medium quality |
| Dillard's (DDS) | BB | lower medium quality |
| J.C. Penney (JCP) | BB | lower medium quality |
| Saks (SKS) | BB | lower medium quality |
| Kmart (KM) | CCC | poor quality |
| Ames (AMESQ.OB) | C | poorest quality |
| RRC Corporate Reputation Ratings range from AAA (highest) to C (lowest), representing a steady decline in a company's ability to leverage its reputation positively. The stronger a company's reputation, the greater its opportunities to implement strategic diversification, achieve optimal competitive positioning, attract talented employees and expand its business, garner support in times of controversy and charge a premium to market for products/services. The weaker a company's reputation, the greater the risk of reputational distress or default. | ||
The Bentonville, Ark.-based behemoth won the top spot in the first-ever Retail Reputation study published in May by Rating Research LLC (RRC) which included not only Wal-Mart, but Ames, BJ's, Costco, Dillard's, Federated, Kmart, Kohl's, May, J.C. Penney, Saks, Sears and Target in its study.
The Bedminster, N.J., company conducted in-depth interviews with senior marketing, sales, operations and finance execs at each of the 13 retailers (who were not allowed to comment on their own companies) and the analysts who follow them. Participants were asked to give their opinion on 25 components of the reputation of retailers selected.
These 25 components were then categorized into eight dimensions representing the “reputational foundation” of each company to include Market Responsiveness; Financial Stability; Ethics; Workforce; Strategic Investment; Differentiation; Loyal Customer/Community; and Workforce Diversity.
RRC is a publisher of research and opinion focused on overall performance expectations of public companies, based on perceptions of strength related to intangible characteristics ranging from quality of management and competitive strengths to ethical business practices and workforce diversity.
While the analysts and retailers agreed on the first and last-place overall finishes of Wal-Mart and Ames, analysts viewed Kohl's (Menomonee Falls, Wis.), BJ's Wholesale Club (Natick, Mass.) and Costco Wholesale (Issaquah, Wash.) 30 percentage points more favorably than store executives did.
| Company | Executives | Analysts |
|---|---|---|
| Ames (AMESQ.OB) | 21% | 0% |
| BJ's (BJ) | 44% | 81% |
| Costco (COST) | 54% | 100% |
| Dillard's (DDS) | 63% | 6% |
| Federated (FD) | 33% | 56% |
| J.C. Penney (JCP) | 40% | 24% |
| Kmart (KM) | 33% | 0% |
| Kohl's (KSS) | 46% | 94% |
| May (MAY) | 46% | 50% |
| Saks (SKS) | 52% | 6% |
| Sears (S) | 57% | 11% |
| Target (TGT) | 69% | 89% |
| Wal-Mart (WMT) | 75% | 94% |
Conversely, the analyst group viewed Dillard's (Little Rock, Ark.), Kmart (Troy, Mich.), Saks (Birmingham, Ala.) and Sears (Hoffman Estates, Ill.) more critically than the executives did. In fact, retail executives viewed the beleaguered Kmart Corp. (Troy, Mich.) as having strengths in the areas of strategic investment and workforce diversity despite its recent troubles in connecting with customers.
For its initial retail survey, RCC selected the volatile discount and department store sector for several reasons. “These companies are viewed as their industry's leaders,” explains Dory Gasorek, RRC principal and chair of its Rating Committee. “This kind of study looks at companies who compete against each other,” she says.
“And, discount stores are increasingly taking market share from department stores.” The research, she notes, was conducted for use by the companies themselves and for other interested third parties, and does not include the opinions of consumers or vendors for that reason.