Nov 30, 2007  |  By: JOEY DiGUGLIELMO  | COMMENTS     

The world’s largest retailer set a record this month but not one its managers are likely to be proud of.

Wal-Mart has the ignominious distinction of having the biggest drop ever from one year to the next on Human Rights Campaign’s annual “Buying for Equality” guide, which ranks companies and identifies their most popular brands. The companies are rated on a scale of zero to 100 with 100 being perfect.

Wal-Mart saw its 2006 rating of 65 plummet to 40 this year. That’s low enough to land in HRC’s red zone (companies that rank zero to 45), which means gays and their supporters are encouraged to “strongly consider other options,” according to Daryl Herrschaft, HRC’s director of the Workplace Project, which each year oversees the shopping guide, the Corporate Equality Index and the Best Places to Work guide. HRC doesn’t encourage boycotts.

Wal-Mart’s 2006 65 rating was enough to stay in the yellow HRC zone (46 to 70). Green is best (85 to 100) according to HRC’s criteria.

Wal-Mart’s drop resulted from losses in two key areas, Herrschaft said. This summer the company opted not to renew its membership in the National Gay and Lesbian Chamber of Commerce (it joined in 2006) resulting in a loss of 15 HRC points. Wal-Mart’s decision to end discussions of implementing domestic partner benefits lost it another 10 points.

Because HRC added four criteria to its scoring this year (previously there were seven), two questions of which pertained to transgender sensitivity issues, scoring 100 got tougher. Wal-Mart had scored 57 the two years before 2006. This year’s score puts it behind competitors Target, which just made green with an 80, and Kmart, which got a 100.

Unlike Bed, Bath & Beyond, CVS or Lowe’s, Wal-Mart did cooperate with the survey by responding, yet its anti-gay decisions from the past year kept it in the HRC ranking basement with other companies like Toys “R” Us and Radio Shack. Best Buy, Borders, Sears and others were among the retailers to earn a perfect score.

Wal-Mart responded to requests for comment only with a canned e-mail from Dan Fogleman, a spokesperson for the company.

“At Wal-Mart, our focus is always on our customers and associates — and that means all of them,” the e-mail said. “As an employer, diversity is truly one of our strengths. Since the very beginning of our company, we have emphasized respect for the individual. To us, that means every associate is valued and a partner in our company’s success.”

Fogleman ignored requests for a phone interview and did not respond to follow-up questions via e-mail.

Wal-Mart spokesperson David Tovar was only slightly more forthcoming with USA Today, which quoted him as saying Wal-Mart is “proud of our diversity initiative and we think we are taking the right steps.” He wouldn’t comment on whether the rating might hurt Wal-Mart’s holiday sales season.

The rating comes at an uncertain time for the company. According to the Associated Press, Wal-Mart’s 2006 shopping season was its worst ever, though net sales for the third quarter of fiscal year 2008 were up nearly 9 percent over the same period for fiscal year 2007, according to a CNN report.

Wal-Mart’s “Black Friday” figures weren’t available as of press time but the company told RTT News, a financial newswire service, that it expects its November numbers for this year to fall somewhere between last year’s number and 2 percent higher.

But how much influence does the HRC guide wield and, financially speaking, should Wal-Mart fear its plunging score?

That’s tough to determine as the influence of the shopping guide hasn’t been studied. A researcher at the University of Vermont is working on a study to determine if HRC’s Corporate Equality Index affects stock prices but its results haven’t been published.

Last December, Witeck-Combs Communications/Harris Interactive polled gay consumers about HRC’s shopping guide and asked how likely the guide would be to influence their shopping choices: 72 percent said they’d be influenced by it.

But the guide has an inverse effect in some arenas as conservative groups, often religious, have been known to encourage their supporters to buy from companies in HRC’s red zone and avoid green zone companies. Herrschaft says HRC’s polling criteria, which assigns point values in key areas, hasn’t been challenged either by companies or conservatives.

Donald Wildmon, founder and chair of American Family Association, sent an ...