August 11, 2016
By Jim Daly
Visa Inc. and Wal-Mart Stores Inc. say there is no news in their standoff that began July 18 with Wal-Mart kicking Visa out of its three stores in Thunder Bay, Ontario. But Visa over the past several weeks has run a marketing campaign to remind residents of the Lake Superior city that it’s still around, and academics are speculating that Wal-Mart is losing sales and having second thoughts about not accepting the biggest payment card brand.
“Nothing to share at this time,” a spokesperson for Mississauga, Ontario-based Walmart Canada told Digital Transactions News Wednesday.
The same from Visa’s Toronto-based Canadian unit. “We do not have any updates to share at this time,” a spokesperson says by email.
But things are happening above and below the surface. Simultaneous with the start of the boycott, Visa launched a very public marketing and advertising campaign in Thunder Bay that includes at least one billboard promoting the card brand just outside the parking lot of a Wal-Mart store. The advertising component consists of “a series of ads featuring local Thunder Bay businesses, highlighting the many places consumers can use their Visa cards—more than 5,200 merchants in Thunder Bay,” the spokesperson says. “Ads could be seen in the local newspaper and on billboards.”
Visa also ran a grocery-store incentive program from July 18 to Aug. 1 in which cardholders who enrolled by the latter date and then made a C$75 ($57.57) Visa purchase in a grocery store by Aug. 16 received a C$25 Visa e-gift card. “Due to the promotion’s success, we offered a similar promotion from July 28 through Aug. 4 where shoppers received a $25 Visa prepaid gift card if they spent $75 or more on groceries,” says the Visa spokesperson.
Wal-Mart is a huge grocery seller in the U.S. and is trying to increase its share of Canada’s grocery market, according to Canadian press reports.
Citing “unacceptably high” acceptance costs, Wal-Mart announced in June that it would stop accepting Visa at all 405 of its Canadian stores through a phased rollout beginning in mid-July with the three in Thunder Bay, a city of about 110,000 in western Ontario. The company still hasn’t said when or where the boycott will expand, but “the intent is to discontinue Visa acceptance as planned,” Wal-Mart’s spokesperson says. “There’s no change to our plans.”
Canada’s CBC News carried a report about the dispute this week with analysis from several business-school professors who believe Wal-Mart has looked at its Thunder Bay sales figures since mid-July, concluded the boycott isn’t going well, and put its expansion on ice. “Visa is winning,” said one academic.
But the professors cited no inside data. Says the Wal-Mart spokesperson: “We don’t comment on speculation.”
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