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