Wal-Mart cutting orders as goods pile up

The company reportedly told suppliers that it will reduce inventory for the rest of the year. Analysts blame missed sales.

By Kim Peterson Sep 25, 2013 2:02PM
Wal-Mart store in Secaucus, New Jersey / Jin Lee/Bloomberg via Getty ImagesWal-Mart (WMT) is taking steps to reduce its inventory for the rest of the year after watching merchandise pile up, Bloomberg reports. And that says a lot about the economic recovery and the consumer mindset these days.

The company is suffering from two related issues. Shoppers just aren't spending as freely as executives predicted. At the same time, Wal-Mart isn't hiring enough workers to keep shelves stocked.

The result is that the company is missing sales and its inventory levels are way too high. Bloomberg reporters saw a Sept. 17 email message to at least one Wal-Mart supplier saying that the company is "looking at reducing inventory for Q3 and Q4." But a company spokesman told the news service that the order pullback isn't "across the board" and is happening "category by category."

When the largest retailer in the country has those problems, it doesn't bode well for the sector as a whole and the upcoming holiday season.

U.S. inventory grew at 6.9% in the second quarter, Bloomberg reports, while U.S. sales only grew at about 2%. That's a fairly stark slowdown from a year earlier, when inventory grew by 3.6% and sales grew by 3.8%.

The back rooms of Wal-Mart stores are full, which is one reason some stores already have Christmas decorations out on the sales floor, Bloomberg reports. There's nowhere else to put light-up penguins and kitschy Christmas items.

"The aisles in the back room are so backed up with stuff," a Wal-Mart stocker in Colorado told Bloomberg. "We brought three pallets of Christmas trees out to the garden center. We usually do that in mid-October. We’re filling it up pretty quick for only being mid-September."

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Tags: WMT
409Comments
Sep 25, 2013 2:40PM
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Maybe they have "missed sales' due to very poorly stocked shelves and poor attitudes by the poorly paid employees.
Sep 25, 2013 2:44PM
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Not stocking shelves seems to be step one in addressing the problem here? Retail 101?

Otherwise no surprise as the rest of the country is still struggling to get by, so people are watching what they buy. When the bulk of the money is in the fewest hands possible it creates a downward spiral. A rich person can only buy so much. Not saying take and redistribute, saying Wall St needs to get a clue and realize that hording the wealth will not get them anywhere in the long run. Businesses need to be reinvested in and companies need to hire and/or increase pay for employees, many who have been shouldering increased workloads as of late with little to no extra compensation. There is a balance to be had and in the short term cutting labor and salaries boost profits but long term if no one has money to buy anything and companies don't go back to paying decent wages everything will fall apart. Hence why middle class is so important.

I think its time

Sep 25, 2013 2:34PM
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When Walmart sales slow down, we pretty much know what the rest of the economy will do. 
Sep 25, 2013 2:41PM
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"Wal-Mart isn't hiring enough workers to keep shelves stocked"

Nothing more to be said.
Sep 25, 2013 2:49PM
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Wait till Obama care gets fully implemented,  you will see the sales drop even more
I don't know to many people can even afford to shop  even at Wallmart working only
 29 1/2 hours a week

Sep 25, 2013 2:43PM
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Exactly when every retail business should be hiring for the holidays they are laying off or not hiring as many as they have in previous years.

 

How is the Obama recovery working for you?

Sep 25, 2013 3:23PM
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The US economy doesn't take a rocket scientist to figure out no matter what BS the government is putting out.  They continue to tell us that things are getting better.  Where?  Not anyplace I've looked.  Paychecks are not keeping up with the rising cost of goods. Period.  Gas-up, food-up, insurance-up, clothing-up, entertainment-way up (look at the cost of a movie ticket.   No wonder so many of us are  renting movies for a buck, netflix, etc.) cable-way, way -up (and rising), 

Health care going up no matter what they say about Obozzocare.   The average person will not qualify for any subsidy and depending upon where you live the costs are all over the board.  Work hours being cut to part time so employers can escape Obozzocare.  And, Obozzo handing out waivers for Obozzocare to all of his friends.  Where the freak is my waiver, or yours?

Looks like its going to be a lean and mean christmas all over the land.  With no money to spend I want to see how the stores are going to sell their goods.  My suggestion, wait until the last possible second to purchase anything for christmas.  The markdowns are going to be terrific.  The stores will be falling all over each other to unload merchandise.

Well, you Dumbocrats and Libretards voted this clown into office (twice) so I guess you will have to suffer right along with the rest of us.  Maybe the government will kick you off the government dole and make you actually go out and earn a living.

Just saying....
Sep 25, 2013 3:14PM
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End of month is coming.   Sells will pick up when the SNAP cards are replenished and the Gov. checks are in the mailbox.  Sad, but true.  Not bashing, just a business person that processes food.
Sep 25, 2013 3:54PM
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We shop Wal-Mart once a week and usually have a good list of the things they were out of stock on that we have to pick up at other retailers. From my observation it is a growing issue as our list seems bigger every week. A simple thing this last weekend really blew me away. Out of butter. Simple regular Sweet Cream salted butter 9:30 Sunday AM.

Sep 25, 2013 3:29PM
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Oh no!! And I thought we were saved!! Golly if Walmart sales are off is it safe, even prudent to suggest it is not the 1% who are cutting back on shopping and consuming? Could it be that....I dunno... the 99% are suffering? Gee...could it be that there is no recovery at all; that it is all nothing but an Oboob lie? That the market shills have been lying to us, too? Jeepers and I thought we were saved. And darn I was all set to piss money away on Wall Street and start consuming again. Dang.

Sep 25, 2013 3:36PM
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Walmart needs to realize that if its not out on the shelves  customers wont nor can't buy it.
Sep 25, 2013 3:39PM
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the issue of stocking shelves is there is never enough people because Wal-Mart keeps cutting hours due to their budget., but when the economy is slow everyone suffers.
Sep 25, 2013 3:22PM
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They keep going up on price I hate that place.
Sep 25, 2013 3:20PM
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THIS STORY COULD NOT BE MORE TRUE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Sep 25, 2013 3:39PM
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And here comes Obamacare that will cost the consumer $250 to $350 a month. What do you think the economy do, down, down, down.

Sep 25, 2013 3:09PM
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Walmart is trying to transition to a higher price operation while keeping overhead down. If Walmart or any other retailer wants more sales either lower the profit margins, or do better promotions.
Sep 25, 2013 3:40PM
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That my folks is just another Obama summer of recovery.
Sep 25, 2013 2:49PM
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There is no ammo. What the F are they talking about?
Sep 25, 2013 3:22PM
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I'm looking for a new larger smart TV and I'm hoping that I can get it for less since inventory is stocking up. The clerks at my local Walmart have stated that holiday sales will be better this year.

Hooray for me for finally getting a break and my heart goes out to everyone who may be adversely effected by this problem.

 

Merry Christmas to everyone and may God bless us all.

Sep 25, 2013 2:50PM
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Considering "P.O. Carl's" comment I must say we are in big trouble. Walmart is about the cheapest place to shop, regardless of quality. If you need it now on a budget go to Walmart. If they have too much inventory what is coming next? I hope we can fix this mess.

 

USA not O-bam

 

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