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
744Comments
Mar 27, 2013 9:13PM
avatar
I am not surprised. I think this is just bad karma biting Wally World in the butt! They are not good people. They have no regard for their employees, the environment, or the impact on the small towns that wither and die when they show up. Their only interest is to build more and more stores, till the whole country is pock marked with them. I have watched 4 different documentaries on Wal-Mart, and I have decided to shop their no longer. From know on I will give my business to Target. It's a small gesture in the larger scheme of things, but a lot of small gestures, put together, makes for a big, big voice that will be heard sooner or later.
Mar 27, 2013 9:13PM
avatar
"Is Walmart self-destructing?"  One can only hope.
Mar 27, 2013 8:58PM
avatar

Up here in Maine the lines waiting to check out are longer than 5 deep, usually more like 15 deep. The shelves aren't as well stocked and the usual shuffle of items on the shelves aren't helping much.

Mar 27, 2013 8:57PM
avatar
Shelves are stocked to the brim at the Walmarts in my town--Mpls.  Not sure what Bloomberg is talking about.   I use the self checkout lanes, so there is rarely a line.   The place is always busy, so either Bloomberg has some kind of agenda against Walmart or they are lying.
Mar 27, 2013 8:56PM
avatar
wait til obamacare fees kick in for real....ALL the competitors will be having the same problem. they'll fire staff to save money, over work the staff they have, and still not be able to keep the shelves stocked.....there won't be anywhere else to go as they'll all be in the same boat
Mar 27, 2013 8:55PM
avatar
Want to talk about how you workforce is holding you back? No problem, I'll hold my money back from you, to show my disapproval of your practices.
Mar 27, 2013 8:55PM
avatar
I've been to two Wal Mart Stores in my neigborhood this past week. Long lines seem to be the norm or only a  few checkouts open.  Service has never been a strong point with Wal Mart, but it is definitely becoming worse. Wal Mart will go the way of K-Mart.......down.
Mar 27, 2013 8:53PM
avatar

As a former employee of Wal-Mart, let me share some helpful hints.  If you have the money buy your cat food, your underwear and your shampoo someplace else.  Wal-Marts prices are low for a reason.   

 

For those of you who are made of sturdier stuff never go shopping at Wal-Mart:

 

1. On the first week of the month.  That is when a lot of the government checks come out. We use to call that  Lowlife week. LOL!

2. Weekends and school holidays.  Many people go to Wal-Mart because its entertaining.  I use to see the same people 3 or 4 times a week.  Sad but true.  Weekends and school holidays are the worst.

3.  The lines are shortest before 9:00 am during the week. 

 

You can order a lot of their stuff online now.

 

 

Mar 27, 2013 8:49PM
avatar
There help is rude and some stores are duty. I hate when they put thing in the main walk ways you and cant even get you cart though with out knocking things over.
Mar 27, 2013 8:49PM
avatar
If have ordered from WalMart on line check your credit card... someone has used my credit card and if you think customer service in the store is bad....try getting a credit and the issue resolved! Form emails and an unbelievable hold time IF and WHEN you finally get a phone number to call. "So sorry...we've referred your complaint to our billing department." Received email "confirming" the purchase, replied immediately and they made no effort to stop the shipment nor have they contacted me by phone.
Be on the alert! The store shelves may not be the only thing that gets emptied.
avatar
I work there and I know that the article is correct. The company is trying to do more with less. They are not hiring enough people to do the work because that cuts into the bonuses of the executives in Bentonville. This includes the stockers, cashiers and  floor help and now are using a task management system that has all but destroyed cash control for the front end,.They cut hours in order to avoid paying health insurance, but the company can bribe the local government in Mexico to the tune of $25,000,000. Walmart is going the way of Woolworth's and that is too bad.
I know this, if Sam Walton were still alive those people in charge in Bentonville would not be able to get work in Walmart as cart pushers.

Mar 27, 2013 8:42PM
avatar
They would be better served if they keep the shelves stocked (especially the higher volume products) - DON'T wait until stocking time at night - you miss important sales. Also, keep the bottom and top shleves better stocked and items "faced out" - not doing so is sending the message "older people, please don't shop here!" for they will not climb shelves to reach clear back to get an item off the top shelf nor get on their hands and knees to get an item in back off a bottom shelf. These are the folks who will go home,  have the time to get on the phone and tell ALL their friends what bad service they received. If folks wanted total self-serve, they'd go to Costco or Sams.
Mar 27, 2013 8:41PM
avatar

I stopped shopping at Wal-Mart over their accepting check policy.  If you require my signature on my check you accept my check.  I will not sign both electronic and my check.  Then you give my check back and put the blame back on me if I loose it and some one uses it fraudulently.   Nope.  Made me so angry that I drive almost 80 miles one way to do my serious grocery shopping. I have not stepped into one since.  Every time, I tell someone this they shake my hand and tell me,"Me Too."  So set aside the empty shelves, low pay, poor treatment of customers and employees,  the automated ordering system (that never stocks the proper local items), long lines, crashing small town economy and the cheap junk they sell.  I can get the same stuff else where and not have to be upset or frustrated.  Thank you Wal-Mart for less stress.  Oh, not that it matters your sales from one customer alone was approximately $300.00 a month nothing really until you start add how many people quit shopping at your locations.  :) Happier now.

 

 

Mar 27, 2013 8:39PM
avatar
Nothing last forever.......welcome to burn out.
Mar 27, 2013 8:35PM
avatar
All Empires FALL......AMERICA is next ....THANKS OBAMA!!!!!!!
Mar 27, 2013 8:30PM
avatar
I can only speak to our local Wal Mart stores, but we have full shelves and little slow down at check out. I am sure there are locations at certain times that checking out may take a while longer but that is true in every store that has a thriving business. As to shopping at Target, our local store has such a poor selection of items and shoddy, shoddy quality. I do not know if this is true in all Target stores but I will not  shop there. In all honesty I question the author of this item as to the research that went into this. A company that hires more employees than any other in the world and has revenue that is more than any other in the world has little to gain by creating problems such as those mentioned. Read it with a little doubt in mind. Empty shelves may mean a very good deal may have caused this. Plus the complaint of not fulfilling a shopping list I do not understand unless it was something only speciality stores carry.
Mar 27, 2013 8:24PM
avatar

If it does go under the top dogs won't suffer.They probably already have profits hidden on foreign shores.

Mar 27, 2013 8:23PM
avatar
I've had my debit card number stolen by an employee in the one in Vicksburg Ms. Last time I walked into a China-Mart!
Mar 27, 2013 8:23PM
avatar

In Lower Bucks, the Wal-Marts seem to be off most peoples' routes at the old Shop-A-Rama site or by Neshaminy Mall. The Target and Kohl's are closer by.  The former Wal-Mart site was closer by in the Fairless Hills Shopping Center where it was the anchor(technically, it's now Giant). Since it moved to Rt. 13 and the Levittown Parkway, several other stores have closed. Therefore, since I haven't been to Wal-Mart very often in the past year, this article and the response to it come as somewhat of a surprise. However, in spite of what Wal-Mart helped to do to our manufacturing base(see Frontline), we need competition.

 

 

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The S&P 500 trades lower by 0.1% with one hour remaining in today's forgettable session.

Today's economic data was limited to the weekly MBA Mortgage Index (+2.8%), but tomorrow will be a bit more busy, featuring the second estimate of Q2 GDP (Briefing.com consensus 2.0%), the Pending Home Sales report for July (consensus 0.5%), and weekly initial claims (consensus 302K).

Elsewhere, Treasuries are on their highs with the 10-yr yield down four basis points at ... More

MSN MONEY'S