Joe Raedle/Getty Images The worst Walmarts are located in low-income, minority communities. 
 
 That's according to a study published in May by Contexts, a quarterly publication of the American Sociological Association. 
 
 A Walmart store's location is closely related to how good or bad the store's customer service is, the study found. 
 
 The study, which was recently highlighted by The Atlantic's CityLab, evaluated customer service by analyzing the Yelp reviews of 2,840 Walmart locations across the US. 
 
 Stores in areas that have lower average incomes have significantly worse customer reviews than locations in higher-income ZIP codes. Additionally, locations in areas with higher proportions of black or Latino residents have worse reviews than those in areas with more white residents. 
 
 The study's author, Adam Reich, an assistant professor of sociology at Columbia University, analyzed approximately 35,000 reviews of Walmart locations and found that there was a consistent correlation between a neighborhood's majority race and socioeconomic status, and a location's Yelp reviews. Reich blames the disparity on Walmart's decision to understaff stores in certain areas. 
 
 In the early 2000s, Walmart implemented cost-cutting policies that reduced the number of necessary employees per store and resulted in a drop in stores' quality. This study provides evidence that a decrease in store quality was not consistent across the board, but instead affected some customers more than others. 
 
 "Walmart is the largest retailer and largest employer in the world; moreover, it has consciously branded itself as a champion of and boon for disadvantaged communities," Reich wrote. "Its underinvestment in these communities is thus particularly notable." 
 
 A Walmart spokesperson told Business Insider that the company found the analysis to be "flawed and without merit." 
 
 David McNew/Getty Images 
 
 "Our customer traffic and overall customer satisfaction scores have been improving and we're focused on continuing to do better," Walmart spokesperson Lorenzo Lopez said in a statement to Business Insider. "Our associates play a critical role in the company's success and that's why we've invested $2.7 billion on associate education, training and wages. We're also proud to provide communities across the country, regardless of social or economic background, access to affordable goods and career opportunities to help them better provide for their families." 
 
 The study may in fact have a few holes. The reliance on Yelp means that researchers can't examine reviewers' biases and outside influences. For example, a store's location in a lower-income or predominantly black or Latino neighborhood may affect how its quality is perceived by some reviewers, regardless of the store's customer service. 
 
 However, this isn't the first time Walmart's apparent understaffing has been called into question. 
 
 Reports of Walmart saving money by reducing staff members have also gotten the retailer into hot water with police. Earlier in August, Bloomberg reported that more than 200 violent crimes had been committed this year at Walmart locations across the US. 
 
 Bloomberg reported that the rise in crime is a result of corporate policies. The cost-cutting policies resulted in a drop in quality, while the loss of greeters and the rise of self-checkout scanners made shoplifting and other illegal activities easier to engage in without employees noticing. 
 
 "In the coming weeks and months, we will continue our increased outreach to law enforcement across the country, as part of our ongoing commitment to meet our customer's and associate's expectations of a safe and enjoyable shopping experience," a Walmart representative said in an email to Business Insider earlier in August. 
 
 While Walmart's cost-cutting policies have had negative — and, at times, dangerous — outcomes for customers, they have also driven profits: Bloomberg found that sales per employee in the US grew 23% in the last decade, to $236,804. 
 
 Joe Raedle / Staff / Getty Images 
 
 Reich writes that the retailer can turn a profit despite providing poor customer service because Walmart's super-low prices have helped put local competition out of business. As a result, Walmart becomes some customers' only option — no matter how poor the shopping experience is. 
 
 However, Reich argues that the retailer may suffer in the long term if it doesn't make some major changes. A poor shopping experience could be increasingly damaging for the brand as online shopping grows and competitors increasingly invest in providing quality in-store experiences. 
 
 "For Walmart and other retailers, providing a pleasant customer service experience seems likely to be increasingly important to corporate profitability," Reich wrote. "For its own sake, then, Walmart should hire more employees, particularly at stores in low-income communities of color, and give all Walmart employees more reasons to smile through better wages and working conditions." ||||| Walmart’s Consumer Redlining 
 
 When Walmart opened its first two stores in Washington D.C. in late 2013, Mayor Vincent Gray said that the massive retailer would help to solve the problem of “food deserts” in the city. Muriel Bowser, then a city council member and now the city’s mayor, gushed, “I’m just glad there is another option for fresh food, another option for goods in neighborhoods where people may not be able to hop in their Lexus and go out to Alexandria to shop.” In early 2016, when Walmart reversed its promise to build two additional supercenters in the city’s poorest neighborhoods—part of the deal that allowed the first two stores to open—the same politicians were outraged: “I’m blood mad,” Bowser said. “It’s an outrage,” echoed Gray. 
 
 But what, exactly, does Walmart bring when it arrives in underserved communities like those in the nation’s capital? We know it brings low prices: Walmart’s innovations in lean inventory and logistics have let it economize on warehouse space and distribution costs, and they have passed these gains along to U.S. consumers. Research has documented the negative effect Walmart has had on prices; some authors argue that the effect of Walmart is so enormous that the Consumer Price Index should be modified to account for it. 
 
 However, other research has shown that the opening of a Walmart in a community leads to job loss and lower wages in the surrounding retail market, thus offsetting some of the effects on prices. 
 
 Most of the popular debate concerning the net impact of Walmart for working families concerns an assumed tradeoff between these two types of effects: Do the cost savings it provides for consumers outweigh the downward pressure on wages and working conditions it places on retail workers and workers across the supply chain? 
 
 But low prices, while important, are not the only consideration for consumers. The ever-expanding service sector is distinct from manufacturing in that workers and customers interact directly on the shop floor. When companies in the service sector underinvest in their workers, whether in the form of understaffing, irregular scheduling, or low-pay and poor benefits, this has consequences for consumers in the form of wait times and lower-quality interactions with staff. The monetary costs of these things are difficult to measure, but an extra fifteen minutes in line for a customer may translate into more spending on a babysitter; empty shelves or rotting produce may mean that an entire shopping trip is wasted time. In the aggregate, the price of waiting certainly adds up: some estimate that Americans spend 37 billion hours waiting in line every year, or 115 hours per person. 
 
 Walmart is distinctive in the retail world for the low ratings it gets for customer service. A recent survey by Marketforce found that Walmart was ranked the lowest across all grocery stores in virtually every dimension of customer preference, from cleanliness to checkout speed. As Figure 1 illustrates, the American Customer Satisfaction Index gives Wal-Mart 68/100, the lowest of all retailers. Consumer Affairs gives it a 1.2 stars out of 5. Understaffing at Walmart is widely recognized as a large and growing problem for the company; between 2005 and 2015 the company increased its retail footprint by 45% while its workforce grew by only 8%. 
 
 I conducted an analysis of the full population of Yelp reviews about Walmart (approximately 35,000 reviews across 2,840 stores). Yelp has approximately 142 million unique visitors per month. A Harvard Business School study published in 2011 found that each “star” in a Yelp rating affects a business’s sales by between 5-9%. 
 
 I found a troubling pattern: Poor customer service is unevenly distributed across Walmart stores in ways that reproduce racial and socioeconomic disadvantage. The racial composition and average income of the neighborhood in which a Walmart is located is strongly associated with the kind of service customers can expect to receive there. Figure 2 illustrates the relationship between characteristics of a zip code in which a Walmart is located and the average Yelp ratings of that Walmart, after controlling for the broader region (three digit zip) in which the store is located, as well as the number of reviews the store has received. Each point on the graph represents the averaged values of approximately 150 stores located in neighborhoods with similar race or SES profiles. 
 
 Walmart stores situated in low-income communities of color consistently get lower Yelp scores than those situated in wealthier, whiter communities. Moreover, when I conduct a similar analysis but work to untangle race from SES (by studying the impact of each controlling for the other), I find that race is more strongly related to low ratings than class. Figure 3 shows the relationship between race and ratings after controlling for income (and the relationship between income and ratings after controlling for race). The higher the percentage of Black or Latino residents in a zip code, the worse Walmart service becomes, regardless of whether this zip code is poor or wealthy. 
 
 I also conducted a text analysis of the Yelp reviews, examining the adjectives used in the reviews most associated with stores in different communities. These analyses provide more descriptive support for the idea that Walmart engages in consumer redlining, systematically neglecting its stores in communities of color. For example, as shown in Figure 4, in stores in predominantly African American zip codes, reviewers are likely to use words like “worst,” “unorganized,” and “nasty” to describe their experiences. In contrast, in stores located in white communities, reviewers were likely to use words like “typical,” “friendly,” and “smaller.” 
 
 Walmart workers understand perhaps better than anyone the obstacles to providing good customer service at the company. In the summer of 2014 I led a team of undergraduate students that conducted interviews with eighty-nine Walmart workers in five different regions of the country (Los Angeles, Dallas, Chicago, Cincinnati, and Central Florida). In these interviews workers expressed how difficult it was to take care of their customers in the face of short staffing and poor working conditions. This was true across sites, although the difficulty seemed particularly acute for those who worked at stores in low-income communities of color. A worker from a store on the South Side of Chicago [Walmart Store #5965] said, “They’d have me working in two or three different departments. If you’re working in all these departments, how are you going to get your department straight? You can’t… That means the customers don’t get help. When they ask for some help, there’s nobody there.” A second worker from the same store said, ““Folks come to the store, they can’t get four things on their list and they only have five things on the list.” The sentiment was shared by a worker from a store in Miami, Florida [#3397], who said, “Customer come in, everything a mess, what you going to do? He cannot buy nothing.” A worker from Cincinnati [#4609] said that her store “never [has] enough workers.” She continued, “Have you ever went in Walmart and had to stand in a long line, or went to get some food from the deli, and there was nobody behind the counter to wait on you? This is going on all the time.” A worker from Franklin, Ohio [#3784], said that “customers come in to get help, they want you to help them.” Putting herself in the shoes of her customers, she continued, “I come in to get something, I want it right then and there. I don’t want it like an hour later. I’ve got a time limit, I’ve got a budget, I’ve got stuff to do. I’ve got to get the girls to bed because of school or something, you know?” 
 
 Underinvestments in staffing lead to low morale among workers in addition to low customer service ratings. It does not feel good to be the target of customer ire. As a worker from Cincinnati [#4609] put it, customers “look at you like you’re doing something wrong, but it ain’t us, it’s the company not having enough workers.” Another worker from Chicago [#5781] said, “I take pride in doing retail work” but “[Walmart] sinks that.” A third worker, from Orlando, Florida [#1084], said that due to low staffing the “customers are getting on your case, and it’s not your fault.” Asked how that made him feel he answered, “Horrible! You feel like you’re being attacked. And it’s not your fault.” For some workers, this pressure is enough to drive them out the door. One worker from Chicago [#1814] described how he reached breaking point: “One day I woke up and I just felt miserable. I felt miserable because I had to go in there, and just having to deal with the pressure of it being so understaffed…. I woke up and I said, enough.” It was impossible to feel a sense of pride in one’s work without being given the resources to do one’s job well. A worker from Cincinnati [#1521] described how customers call her store the “Ghetto Walmart,” because of its low customer service. “It kind of hurts my feelings,” she says. The single word most highly correlated with reviews of Walmarts in communities of color is “ghetto.” 
 
 If Walmart were operating in an efficient market, one might argue that any increase in customer service—from more staffing to higher wages—would need to be passed on to customers in the form of higher prices. But Walmart’s poor and differentiated service is consistent with a story in which Walmart’s lower-cost distribution network allows it to enter a market and establish a local monopoly. The technical term for market power in the labor market is “monopsony”, and it operates exactly like monopoly in reverse: instead of raising prices and lowering product quality and quantity to increase profits, profits are increased by lowering wages and staffing levels, worker effort, and employee retention. All companies trade-off lower turnover and effort for lower wages; Walmart is distinct for the extent to which it has chosen a strategy in which low-wage workers do not stay very long, do not invest much effort, but are paid such low wages that Walmart is still making a profit. 
 
 Market power and increasing monopoly has become an increasing concern in recent years. The increasing concentration of business has been documented in virtually every sector, and is partially responsible for the pattern of increasing corporate profits, a larger capital share, and lower productivity since 2001. A poster child for this concentration has been the airline industry, cartelized by horizontal shareholding among institutional investors like BlackRock. Recent work finds that institutional investors increased airline fares by between 3 and 10%. As anyone who has flown on a US airline or called a cable company knows, customer service is often the margin that companies with market power use to cut costs at the expense of customers. 
 
 When Walmart enters underserved neighborhoods like those in Washington D.C., then, it does not do much in the way of enhancing customers’ options. Rather, it chases the lowest common denominator, exploiting the lack of other options in the neighborhood for customers and workers, and creating a shopping (and working) environment that is just marginally above what was there (or wasn’t there) before. 
 
 This preliminary analysis cannot tell us the extent to which the patterns we observe at Walmart are true across other major retailers, and cannot explain why we observe the patterns we do. Nevertheless, Walmart is the largest retailer and largest employer in the world; moreover, it has consciously branded itself as a champion of and boon for disadvantaged communities. Its underinvestment in these communities is thus particularly notable. 
 
 While businesses might normally be averse to a reputation for poor customer service, it is important to remember that shareholders tend not to care about image per-se, only image insofar as it is worth the costs and investment. Walmart has decided that its path to profitability involves exploiting its local market power over both workers and consumers. Yet investors interested in maintaining long-term brand value may be concerned about Walmart’s understaffing, low-wage, high-turnover human resource strategy. Given the rise of online retail, which allows consumers to shop from the comfort of their couches, Walmart’s local monopolies are likely to be short-lived. 
 
 For Walmart and other retailers, providing a pleasant customer service experience seems likely to be increasingly important to corporate profitability. For its own sake, then, Walmart should hire more employees, particularly at stores in low-income communities of color, and give all Walmart employees more reasons to smile through better wages and working conditions. 
 
 Adam Reich is in the sociology department at Columbia University. He is the author, most recently, of Selling Our Souls: The Commodification of Hospital Care in the United States. 
 
 Special thanks to Meghan Lambert for creating the graphics. ||||| All Walmarts are, bluntly, not created equal. Some have better customer service than others and are just plain more pleasant shopping experiences. And if you’ve felt like the Walmarts in richer ZIP codes are more likely to be the nicer ones, well, one study says you’re right. 
 
 A study published this year took a look at Walmart customer satisfaction by analyzing the 35,000 total Yelp reviews for all Walmarts nationwide. And the trend the researcher found is… disquieting. 
 
 The reviews covered a total of 2.840 stores. Among them, the study found, reviews for stores in areas with a lower average income were significantly worse than reviews for stores in areas with higher incomes. 
 
 And worse: even controlling for average area income, the higher the percentage of black or Latino residents in a certain ZIP code, the worse a Walmart there would rate. 
 
 The researcher running the study didn’t just look at the numerical ratings stores got; he also looked at the words reviewers were using to describe them. Stores in areas with predominantly black residents tended to be “negative,” “nasty,” “terrible,” “unorganized,” and, mainly, “worst.” Stores in areas with mostly white residents tended to be “friendly,” “typical,” “clean,” and even “pleasant” or “amazing.” 
 
 Now, it seems incredibly unlikely that anyone at Walmart is actually sitting around twirling their handlebar moustache and trying to figure out how to make life miserable for low-income or minority customers on purpose. Still, the trend in the data is there — so what’s going on? 
 
 The researcher who conducted the study points to chronic understaffing and poor working conditions as probably causing the poorer service. In a series of interviews, he and his student-assistants talked to 89 Walmart workers around the country. Employees across the board reported a lack of support, but it seemed “particularly acute,” he writes, for employees working in low-income communities of color. 
 
 And all of that — Walmart’s ability to cut corners and generally suck while still drawing in customers — is tied to competition, the researcher suggests, or specifically, the lack of it. 
 
 Walmart is able to compete so aggressively on price that it drives other retailers out of an area and establish a local monopoly, the researcher suggests. It’s called a “monopsony”: 
 
 “Instead of raising prices and lowering product quality and quantity to increase profits, profits are increased by lowering wages and staffing levels, worker effort, and employee retention. All companies trade-off lower turnover and effort for lower wages; Walmart is distinct for the extent to which it has chosen a strategy in which low-wage workers do not stay very long, do not invest much effort, but are paid such low wages that Walmart is still making a profit.” 
 
 Walmart, of course, thinks the study is bunk. In a statement to Business Insider, a spokesperson for Walmart called it “flawed and without merit.” 
 
 “Our customer traffic and overall customer satisfaction scores have been improving and we’re focused on continuing to do better,” the representative told BI, tacitly acknowledging that the company has some pretty serious customer satisfaction problems overall. 
 
 The statement continued: “Our associates play a critical role in the company’s success and that’s why we’ve invested $2.7 billion on associate education, training and wages. We’re also proud to provide communities across the country, regardless of social or economic background, access to affordable goods and career opportunities to help them better provide for their families.” 
 
 And, as BI points out, the study itself may be flawed: using Yelp alone, though it generated a fairly high sample of reviews, can’t account for other biases or outside influences. The Yelp-using population may not be representative of the broader population, or it may be predisposed to perceive any store in a ZIP code mainly populated by people of color as low-quality, regardless of the reality. 
 
 On the other hand, the Yelp reviewers aren’t the first to notice a significant absence of staff at Walmart stores, either: staff cutbacks have led to increased crime across the board at Walmart locations. 
 
 Want more stories from Consumerist? We’re a non-profit! You can get more stories like this in our twice weekly ad-free newsletter! Click here to sign up. 
 
 walmart’s consumer redlining [Contexts] 
 
 A study reveals a disturbing trend about Walmart locations across the US [Business Insider] ||||| Researchers and workers point to the company’s chronic understaffing of stores in communities of color. 
 
 Daniel Coles, a Walmart worker in Paramount, California, feels it’s impossible for him to do his job well. “Right now we are understaffed big time,” says Coles, who works in a predominantly Latino, working-class community. “Especially at the front end, we don't have enough cashiers to take care of customers, so we have long lines.” 
 
 
 
 Coles says he faced similar problems at his previous Walmart job in Crenshaw, a majority-black neighborhood in Los Angeles, but had a much better experience at a Walmart in San Bernardino, which he says catered more to middle-class, white customers. “At San Bernardino, we had enough staffing, we weren't really short at all,” says Coles. “We had coverage in every department, so customers respected us because it was a good experience.” 
 
 
 
 In Coles’s experience, Walmart seemed to prioritize adequate staffing and customer satisfaction far more in white communities. New research suggests that his experience may be shared by Walmart workers in communities of color across the country. 
 
 Adam Reich, an assistant* professor of sociology at Columbia University, conducted an analysis of roughly 35,000 Yelp reviews of all of Walmart’s stores nationwide. Among the 2,840 Walmart stores the reviews pertained to, Reich found that the higher the percentage of Black or Latino residents in a zip code, the lower the Yelp reviews were of stores in that area, even when controlling for the area’s average income. 
 
 When Reich analyzed the adjectives in the Yelp reviews used to describe stores, however, he noticed another telling pattern: Much of the ratings’ language seemed to be about store characteristics, rather than racial judgments. 
 
 (Adam Reich, Columbia University) 
 
 In Walmart stores in predominantly black zip codes, customers were more likely to use words like “worst,” “unorganized,” “nasty,” and “slow” to describe their shopping experiences. In predominantly white zip codes, customers used words like “smaller,” “friendly,” and “clean” to review their stores. 
 
 
 
 Reich says this evidence, along with interviews his team collected from 89 Walmart workers in Los Angeles, Dallas, Chicago, Cincinnati, and Florida, suggest that Walmart systematically understaffs stores in communities of color, a practice he calls “consumer redlining.” (Walmart did not respond to CityLab inquiries about Reich’s hypothesis.) 
 
 
 
 But this perceived understaffing may not necessarily be a result of explicit racial animus so much as a natural consequence of Walmart’s business model, which relies on far lower labor costs than its competitors. Since Walmart opens up many stores in areas where consumers already have few shopping options, the chain, Reich argues, has little incentive to invest in labor for these stores, which are often in communities of color. 
 
 “When Walmart moves into the South Side of Chicago, it’s not really displacing numerous other businesses,” says Reich. “So it can shortchange investments in staff, and force people to work harder. Consumers don’t have a choice about where they’re shopping.” 
 
 
 
 Anthony Roberts, an assistant professor of sociology at California State University who has written extensively on Walmart’s urban-expansion attempts in recent years, points out that such staffing decisions are integral to Walmart’s model. 
 
 
 
 “The company utilizes data from its stores to predict the optimal staffing levels at the local and regional levels. Employee compensation is an important factor in this analysis, because the company's retail model depends on low wages for profitability,” says Roberts in an email to CityLab. “Given the dependence of these communities on Walmart stores, there seems to be very little need to address poor customer satisfaction… .” 
 
 This argument resonates with Coles’s experience working with Walmart customers. “Customers [in black and Latino communities] figure it’d be more convenient to not have to travel to Timbuktu to go to another Walmart, or to the ‘right’ neighborhood area because of gas and all that,” says Coles. He notes that the company also conducts “a lot of customer surveys about people's shopping experiences,” which help gauge how much money specific stores bring in—and therefore may influence the number of employees hired. 
 
 These labor cost-saving strategies, however, may actually be hurting Walmart’s ability to expand, especially in urban markets with large black and Latino populations. Though Walmart has made inroads in cities like Chicago, Dallas, Houston, Atlanta, and Washington, D.C., it has struggled to break into other major urban centers such as Boston, New York, San Francisco, and Seattle, in large part due to community mobilization and political pressure. 
 
 
 
 Walmart’s failure to capture its national average market share in the most urban areas has cost it nearly $96 billion dollars a year, according to a 2015 UCLA study by the Institute for Research on Labor and Employment. 
 
 
 
 “Labor investment is critical for penetrating the urban market, because these communities are most concerned about job prospects in local development,” says Roberts. “If Walmart wants to dramatically break into the urban market, the company needs to address its reputation of creating 'bad jobs' by expanding and investing in its labor force.” 
 
 If customers feel the toll of this model of labor investment, Walmart workers in black and Latino communities do, as well. “At Crenshaw, customers would say, ‘Y'all so ghetto. You don't have enough registers, customer service people,’” says Coles. “It was sad to see how the company didn't care about the [workers]. … They are looking at the bottom line, that’s it.” 
 
 
 
 *CORRECTION: This post has been updated with Adam Reich’s correct title.
– Ouch. A study out of Columbia University suggests that Walmart deliberately runs much better stores in white neighborhoods than in minority neighborhoods. The study found that stores in lower-income neighborhoods have considerably lower customer service ratings than those in wealthier ones. More specifically, the higher the percentage of black or Latino residents in an area, the lower the Walmart rating, reports Consumerist. The researchers suggest one reason is that the chain generally doesn't staff stores in low-income neighborhoods adequately because it doesn't need to do so—Walmarts in such neighborhoods are often the only place people can shop, and thus competition and customer satisfaction aren't priorities. “When Walmart moves into the South Side of Chicago, it’s not really displacing numerous other businesses,” study author Adam Reich tells the Atlantic. “So it can shortchange investments in staff, and force people to work harder. Consumers don’t have a choice about where they’re shopping.” The authors, who published their study in the American Sociological Association journal Contexts, analyzed Yelp reviews of 2,840 stores and found that those in predominantly black areas tend to be rated with words like "nasty," "terrible," and "unorganized," while those in white areas tend to be described as "friendly," "clean," and "pleasant." A Walmart spokesperson tells Business Insider that the analysis is both "flawed" and "without merit," and the publication notes a few "holes," including that reviewer bias and outside influence can't be accounted for. (More than 200 violent crimes have been reported at Walmarts so far this year.)