The Story Behind Walmart’s Bare Shelves

American Interest ^

[Perdogg]

Walmart is starting to look like a Soviet-era retailer. The prices are still low, but shelves are going empty for months while products sit unwrapped in storage, lines are interminable, and no one is around to help.

Bloomberg reports that in-store service problems for the world’s third-largest corporation are so bad that people are willing to pony up the extra cash to shop at stores like Target and Walgreens. Walmart’s problem, says MIT retail researcher Zeynep Ton, is a shortage of cheap labor:

[Hildred Castaigne]

Problem: Shortage of cheap labor. What could possibly be the solution? Economics 101? Raise wages?

If you raise wages, then you're not showing ever-increasing profits, which means the shareholders boot you. Gotta make that quarterly. Gotta worry about the "bonus situation". It's corporate suicide to do otherwise.

Some try to maximize profit by not having adequate staff. Better profit, higher individual bonus.

Some? Try all...or at least, all who want to keep their jobs.

Perhaps if businesses didn’t pay such abysmal wages that living off of welfare was an actual viable alternative...No, that just makes too much sense. The invisible hand of the free market will fix it. Right?

Yes, it will. Frankly, most Americans get paid too much. I believe that if you're not a tech or management, then you're worth about as much as a Bangladeshi in a sweatshop over there - and should be paid the equivalent.

[Graybeard58]

I saidSome try to maximize profit by not having adequate staff. Better profit, higher individual bonus.

You said Some? Try all...or at least, all who want to keep their jobs.

Of course they do, it's their job but when they cross the point of diminishing returns then enter into negative returns. Not enough cashiers nor enough stockers and they start losing customers, as testified to by many on this very thread.

Disclosure, My wife is a salaried employee of Wal-Mart, we have lots (for us) of stock and stock options, we very much want the company to be profitable, plus my wife's bonuses, are based in part on those profits, well, ultimately all of her income is based on profit because without it, she wouldn't have a job.

[packrat35]

I feel the same as you. Even my wife, a true die hard WalMart fan has cut back to twice a month now and shopping more elsewhere.

But I am sure plenty of freepers will be here to say this is just an attack on WalMart by unions or somesuch boogieman instead of admitting it is becoming a trend from them.

[packrat35]

WalMart has understaffed the registers for at least 10 years. Obamacare has nothing to do with it, but I do expect it to get worse. 25 registers and never more than 4 open, that;s the WalMart way.

[jjotto]

Where I’m at, Wal-Mart has never been competitive on groceries. Only things I know they’re reliably inexpensive on is toiletries/beauty items.

[packrat35]

I HATE self checkouts and REFUSE to use them. Everytime I try, something errors and I have to wait on the clerk to fix. Usually a weight thing or odd sized item (of which there are many in a hardware store).

[packrat35]

My wife does the shopping and the superstores were convient one stop shopping. Now she dreads going there almost as much as me.

[only1percent]

Wal Mart stores aren’t understaffed due the lack of willing labor even at Wal Mart wages. It’s because mangement rations the wage budgets that supervisors have to put workers on the schedule. It’s a standard way to manage a big box retailer or supermarket, but it’s really easy to screw up. Wal Mart is prone to it because they long ago gave up on marketing themselves as a nice place to shop. Bad customer experience is par for the course.

[Free Market Will Fix It]

Worth about as much as a Bangladeshi in a sweat shop?

You know, keep spouting off rhetoric like that and continue to see the GOP fail harder than it already is with voters.

[nascarnation]

For sure WM is feeling competition from Dollar General and Family Dollar, as people slide down the economic slope in the ongoing Baraqqi Depression.

[packrat35]

I go to Dollar Tree about once every two or three months and I end up spending $40-$50 every time. Plenty of stuff there cheaper than WalMart without all the fuss.

[packrat35]

You are right. They try to squeeze every penny too tight and it is driving off shoppers. Standing in line for 30 minutes, out of standard items, dirty stores, etc..

[discostu]

WalMart’s profit margin is usually around 2%, which means for every dollar that comes in the front door 98 cents goes out the back. The only reason they make billions in profit is economies of scale, if you get a hundred billion dollars coming in the front door even a 2% profit margin gives you a lot of dollars. But increasing salaries by even a little would eat that profit margin. It’s the basic problem with their business model, it’s a penny pinching model, by always selling for as cheap as possible they don’t give themselves room to maneuver. Target doesn’t try so hard to be cheap, they’ve got room to pay more; costco achieve cheapness through power buying and not having to have all items all the time, they get to pay a lot more but you can’t trust the inventory.

[nascarnation]

They have a very competitive business model. As America’s standard of living declines, these type stores will continue to be a growth story.

[circlecity]

"Where’s my small violin?"

Save it for the whiners who think corporations are obligated to wipe their ass for them.

[ican'tbelieveit]

I do believe we had a troll.

[Gabz]

You’re telling me a corporation that racks up multi billions in profit can’t afford to pay their workers a livable wage?

I don't know where you live (and don't particularly care) but I can tell you that WalMarts in my area pay on the same level as the poultry processing plants, for far less taxing or nasty work. The poultry plants are the largest employers in this area, but have far fewer applicants per opening than WM - that tells me something about WM.