Wal-Mart shows signs of self-destructing

Empty shelves and longer checkout lines are pushing many customers to Target and other rivals. What's going on?

By Aimee Picchi Mar 27, 2013 1:37PM

File photo of empty shelves in a New Jersey Wal-Mart (© Najlah Feanny/Corbis)Love it or hate it, Wal-Mart (WMT) has long been held up as a paragon of operational efficiency, spawning business school case studies and inspiring rivals to copy some of its techniques. 

But recently, the retailing giant has been off its game. First, it issued a dire warning last month that February sales were a "total disaster" because of higher payroll taxes. Then, it blamed late tax refunds for a sales slowdown. 

But a new report suggests that delayed refunds and tax hikes might be only part of the picture and that the retailer itself shoulders much of the blame. 

Merchandise isn't making it to Wal-Mart shelves, and on top of that, long checkout lines are driving customers into the aisles of rivals such as Target (TGT) and Kohl's (KSS), reports Bloomberg News

"If it’s not on the shelf, I can't buy it," retired accountant Margaret Hancock told Bloomberg, describing a recent visit to Wal-Mart when she failed find a dozen basic items. "You hate to see a company self-destruct, but there are other places to go."

What's causing the problems? According to the article, Wal-Mart has the merchandise, but it's not hiring enough staff to restock shelves. 

That's illustrated in the disparity between Wal-Mart's store expansion, with the company boosting new locations by 13% over the past five years, and hiring, which rose a measly 1.4% during the same time, Bloomberg notes. 

Checkout lines are getting longer, and customer service has suffered, the article says. 

A recent visit to a New Jersey Wal-Mart found only 12 out of 30 registers open, with lines about five customers deep, Bloomberg said. Shelves had empty spaces "large enough for a grown man to lie down." No surprise, then, that Wal-Mart placed last in among department and discount stores last month in the American Customer Satisfaction Index

Wal-Mart said Bloomberg's report is "inaccurate and not representative of what is happening in our stores across the country."

Meanwhile, labor issues are creating a headache for Wal-Mart on another front. The company sued a major grocery workers union, citing alleged "disruptive tactics" and "illegal trespassing," as my colleague Jason Notte wrote on Tuesday.

Regardless of what's causing Wal-Mart's problems, rolling back both customer service and available merchandise generally isn't considered a recipe for retailing success.

More on moneyNOW

Tags: RetailTGT
Mar 27, 2013 2:18PM
I must agree with the report. Walmart, you are self-destructing.  LOOOONG lines at the checkout for no good reason.  Very poor customer service.  I tried getting a clerk's attention for 5 minutes while he chatted with a co-worker about what all had to get done.  When I finally did he was rude. I wanted a product they used to have only to find out they have switched AGAIN, another of my pet peeves with them.  They changed the layout of the grocery store that makes NO sense whatsoever but I think is designed to make you walk down more aisles.  On top of that don't assume their prices are cheapest.  I've done some comparison recently and they have jacked up the price on many things.  Throw in the way they treat their employees and the whole place just leaves a really bad taste.  You better get the employee thing figured out, start treating your employees decently and they might actually want to work and provide good customer service.  Target and Kohls are going to kick your butt.
Mar 27, 2013 2:09PM
It couldn't happen to a nicer company! hahahahahaha
Mar 27, 2013 2:22PM
Thank you for this article.  I've been saying this over the past year. Their prices may be good, but if it's not on the shelf it doesn't matter.  The lines are long, and many of the employees are apathetic or have attitude problems, and the lines are always long.  And don't even bother trying to return something at "Customer Service"  they don't know what that means.   Bottom line is it's not worth the aggravation to shop there.  Give me Target any day.
Mar 27, 2013 2:13PM

There is to much greed in store, district, regional and company management.  Its more about their pay and benefit package than the worker bee's filling the shelves.  Always has been!!


Mar 27, 2013 2:40PM

This story is dead on despite Wal-Mart's denial.


Even if I know Wal-Mart has the item, it will take me 10 minutes to pick it up and get to a register, and then 15-20 minutes to check out.  I've decided instead of this game to go to Target.  Sure I'm paying a few bucks more for basic items but it's a cleaner store, they still have my item, and I am not waiting twice as long in line to leave as my shopping experience.

Mar 27, 2013 2:10PM
Mar 27, 2013 2:32PM

the last two times I went to the Walmart near me in northern NJ I found what I was going to buy, then put it back when less than half the registers were open and every line was 10 people long, except the 20 items or less lanes which were 20 people long.  I don't plan on going back.


plenty of other companies are happy to take my business and provide me with basic customer service.

Mar 27, 2013 2:14PM
its all about profit and not paying employees a decent wage = closed tills and less help and lines to get checked out through
Mar 27, 2013 2:15PM
The Walmarts near me (3 within 15 miles or so) have not refilled their toy section since Christmas, their electronics are a mess, and the pet supplies are almost always empty. I can usually find most things I need in the food section but the rest are a wreck.

It wasn't this way a couple years ago. They are really plummeting downhill.

Mar 27, 2013 2:32PM
I've seen Wal-Mart's customer service regression mounting for years.  When lack of merchandise and/or long lines are brought to store mgmt attention, it's ignored.  In my opinion, the WM corp. interest is just on increasing their stock value by cutting cs corners and let the buyer beware.  Maybe WM mgmt should look back at their history... it was because of poor discount store services that Mr. Walton created Wal-Mart.  Unless somebody wakes up, soon.... deja vu.
Mar 27, 2013 2:14PM
Sound like they may need to raise wages to attract workers. Supply and demand. As the economy supposedly improves people go to work for better employers.
Mar 27, 2013 2:44PM

Walmart is dying! They treat their employees poorly, don't offer health insurance or enough hours of work to support themselves, they have cut health insurance for all but a few of their workers.  They pay their employees so little, and yet instruct them on how to apply for food stamps, paid for by the taxpayers. Walmart can complain about taxes, restocking issues, merchandising problems, etc. all they want, but the real problem with their current situation is that millions of people boycotted them for the Christmas and Hanukkah holidays and now they are feeling the repercussions of low sales and profits.  We are in the first quarter of the year, when we get the numbers for how our Christmas sales performed in the market.  It's not surprising at all that Walmart did so poorly.  During the boycott many Americans learned the truth about Walmart's treatment of its employees, and, surprise, no one wants to shop there anymore. Word it out now and I don't think Walmart will ever recover.


Mar 27, 2013 2:31PM
We have two super-Walmarts in twenty square miles and they are putting up another one.  The long lines at the cash registers is true in both operating stores and signs out "now hiring".  You can't get service to save your life.  Last week my wife was all excited about an expanded fabric/sewing sextion only to find no one to cut the fabric.  Talked to three different emplyees who said they would get someone.  A sign said to contact the camera department for service.  Guess what?  No one there either.  When we were cheking out -- finally -- a store manager got someone to help my wife with the faabric, which was why we had come to the store anyway.  I also am finding that products advertised online are not in the store, so good luck if you want to look and and touch something before you buy.  Where oh where is Sam Walton?
Mar 27, 2013 2:34PM
I'll try not to lose any sleep over the scumbag of the retail world.
Mar 27, 2013 2:35PM
Get the sheep coming in, then change for the worse. The execs get their 6 and 7 figure salarys while the stupid sheep that remain swear they are getting great deals.
Mar 27, 2013 2:31PM
no he lies we have 4 walmarts within 20 miles in Winchester va.  shelves are not stocked produce has to be eaten on the way home or the next day or it rots. you can sell cheap when what you sell is cheap,same for clothes see how long they last,check the little tags those numbers are walmart numbers meaning they are made for walmart ask them. pants with 4 belt loops shirts that are short or shrink after one washing. they caused all the mom and pop stores to close they caused sears and k mart and penny's to lose besness ready to close up,so what does that leave you with,get it now
Mar 27, 2013 1:52PM
More than half the time when I go to buy cat food there, the major brand we prefer is out of stock.
What would Mr Sam think? Or, more importantly, what would Mrs. Sam think? She had to brow beat the old bastar# into offering the associate profit-sharing program.
Mar 27, 2013 2:43PM
I noticedthe same thing in my store in Pennylvania, Philadelphia Suburbs.  However, there were gaps in the grocery section as well.  This seems to explain why they didn't have 3 of the nine things I was looking for.  Went to a competitor and they had everything on my list.  Sooner or later, it always happens to the biggest fish!  Sears and Reobuck, Ames, Two Guys, Caldor, Cirsuit City, Lionel Kiddie City, etc.  All of thm, except the old Sears Roebuck, combined didn't equal Wal Mart.  the bigger they are, the harder they fall! 
Mar 27, 2013 2:43PM
The Walmart I usually shop at is absolutely terrible at restocking sold out items, some popular items never get restocked.  Go in for specific items normally stocked and repeatedly find empty shelves.  I often give up, go somewhere else without bothering to buy the few items they do have in stock.  Disappointing same store sales shouldn't surprise anyone.  Apparently the stores in northwest Arkansas are better stocked and management is not aware of the problem. 
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