Consumer Response to Corporate Political Statements: Evidence From Geolocation Data

I use Walmart's decision to discontinue sales of certain gun ammunition, ban open carry in stores, and encourage enactment of gun control policy as a setting to study how consumers respond when firms make political statements. Using smartphone-location data to measure foot traffic, I find store visits to Walmart decreased by 3.2% relative to competitors after Walmart’s statement. Store visits in highly Republican counties decreased by 10% but increased by 3.4% in highly Democratic counties. The effect is temporary when viewed in aggregate but persists in highly Republican counties. Further, remaining customers spent 3.5% more time in stores. The results highlight the challenges firms face when navigating an increasingly polarized political landscape.