Walmart Can't Keep Its Shelves Stocked

John Krautzel
Posted by in Retail


 

With more than 10,700 Sam's and Walmart stores around the globe, Walmart is indisputably the discount leader in the retail industry. This industry giant sells everything from clothing to landscaping products to groceries, including many Walmart products under the Great Value brand name. The company hit $466 billion dollars in gross revenue in 2012, leaving many people to wonder why the Walmart products and other brands that are flying off the stores' shelves are leaving large expanses of empty space that the stores seem unwilling or unable to restock.

 

The trouble started back in 2009, when the company decided to change its already-successful formula to make some strategically placed Walmart stores a bit more upscale. One of the first things it did was to bring in new categories, including organic foods and nicer clothing, and declutter to get rid of the club-store look. In doing so, it took thousands of SKUs off its shelves, including both Walmart products and other brands that were not performing up to its standards.

 

The push to try to change its image was a failure, as customers instead shopped at the club and dollar stores to try to find the brands they wanted to buy at discount prices. By 2011, the company announced that it would bring back at least 8,500 items, including some of the Walmart products it had previously discontinued. Its decision to bring back those Walmart products and other brands came at the same time that the company was undergoing cost-cutting measures that effectively reduced its workforce by 120,000 employees between 2008 and the beginning of 2013. Employees say the staff cuts have made it difficult to stock shelves while running cash registers and performing other duties.

 

Not only are there not enough employees in the stores to properly restock the shelves, the ones who are there are being asked to do more than they can realistically accomplish in one shift, leaving disgruntled employees, empty shelves, and unhappy customers. Walmart CEO Bill Simon blames the problem on new inventory not coming in quickly enough to keep the shelves stocked, while other Walmart executives have said that the problem of too few employees is not widespread. Whatever the cause, the Walmart senior management team has created a new executive vice president position to address the problem. Despite problems stocking merchandise, Walmart is still a powerful player in the retail business. Melissa Kennedy reports that the retailer brought in more money than General Electric, Exxon Mobil, Pfizer, and Chevron in 2010.

 

When the economy gets tough, retailers often try creative solutions to try to keep customers coming through the doors. In the case of Walmart, its initial solution clearly did not work. In an effort to reverse its original plan and go back to its classic operations, it failed to ensure a workforce large enough to keep Walmart products and other popular brands stocked. Only time will tell if the company will address this problem properly so that it can recover.

 

(Photo courtesy of freedigitalphotos.net)

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