PR disaster: 63 Sam’s Clubs shut down without announcement

On January 12, 2018, Walmart abruptly closed down 63 stores  across the country. Employees and customers went in for their daily shopping spree to Sam’s Club just to find closed doors—no signs, no emails, no warning.

You can imagine how the press responded to this. Hundreds of journalists and publications jumped on the opportunity to address the absurd event. Publications like Business Wire, Business Insider, Forbes, and other major media platforms posted articles that each had thousands of shares. In just one day, Walmart went from hero to zero. We can thank mass media for that.

As PR professionals and chapter members, we can join the media and bash on Walmart just like the entire United States press, or we can simply look at Walmart’s losses and learn from them. One of the best ways PRSA members can learn about the most common trends in PR is to look at examples around them, good or bad. In this case, we have a very bad example, but that won’t stop us from learning.

Here are some things we can learn from Sam’s Club:

Be transparent

Walmart decided to close the stores before telling a single employee or customer. Imagine working someplace for more than 30 years, and one day you go to work to find closed doors. The event shattered employee trust. Sometimes companies have hard truths to share, such as letting people go, but sharing the hard truth is better than keeping them hidden from stakeholders until information is publicly revealed.

Not only did employees take a hit, but loyal customers felt abandoned by the lack of transparency. One loyal shopper, Bryanna, tweeted: “This is seriously making me sick and terribly sad. I loved my local Sam’s Club. The employees there were older but so friendly and amazing. To just show up to work today with the doors locked on them breaks my heart. P.S. Sam’s had the best pretzels I have ever had.”

Since day one, we have learned that transparency is key in best PR practices. Imagine the public’s reaction had Walmart told employees and customers in advance—still heartache, but maybe less rage. We need to be transparent to avoid major letdowns.

 

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 Don’t try to cover things up

According to USA Today, “The Sam’s Club closures were confirmed the same day Walmart said it would lift the hourly minimum wage in the U.S. to $11 and give out bonuses of up to $1,000.”

The statement Walmart made to increase employee wages to $11 per hour went viral, and the public looked at the announcement in a mainly positive way. Ironically, when people discovered the abrupt closure of 63 stores a week later, this happy news backfired. People realized it was just a cover-up.

Because Walmart was trying to hide the bad news with good news, the good news turned into bad news in the end. The only good news here, however, is that we can learn to never try and cover up bad news (try to say that 10 times fast).

 

Put PR in the middle of management decisions

Former Walmart Vice President Samuel Dunn said, “The power to make good decisions is rooted in a daily ‘power hour’ where you can ponder, think and consult before you make a decision.”

If Dunn wasn’t retired, maybe he could’ve changed the entire strategy Walmart used to back its decision to close 63 Sam’s Club stores without any forewarning. Not this time. Sometimes management doesn’t take the time to think about how decisions will affect the public. As PR professionals, we understand the value we can have in corporate communications, especially when making decisions that could have a massive effect on the public.

You live and you learn

 In the end, we need to be on our toes when it comes to deciding what and what not to share in a company or organization. With the power and influence of mass media today, one message can drastically change public image. As advocates, it is our responsibility to build awareness about these crises before they even happen.

Written by Heidi Zundel

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