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DainBramaged

(39,191 posts)
Thu Mar 28, 2013, 01:19 PM Mar 2013

Walmart Faces the Cost of Cost-Cutting: Empty Shelves

Margaret Hancock long considered her local Walmart superstore her one-stop shopping destination. But during recent visits, the retired accountant from Newark, Del., says she failed to find more than a dozen items, including certain types of face cream, cold medicine, mouthwash, bandages, and hangers. Walmart’s loss was a gain for Kohl’s (KSS), Safeway (SWY), Target (TGT), and Walgreens (WAG)—the chains Hancock visited for the unavailable items. “If it’s not on the shelf, I can’t buy it,” she explains. “You hate to see a company self-destruct, but there are other places to go.”

Wal-Mart Stores (WMT) has been cutting staff since the recession—and pallets of merchandise are piling up in its stockrooms as shelves go unfilled. In the past five years the world’s largest retailer added 455 U.S. Walmart stores, a 13 percent increase, according to company filings in late January. In the same period its total U.S. workforce, which includes employees at its Sam’s Club warehouse stores, dropped by about 20,000, or 1.4 percent.

The retailer says reports of stocking problems are overblown. “Our in-stock levels are up significantly in the last few years, so the premise of this story, which is based on the comments of a handful of people, is inaccurate and not representative of what is happening in our stores across the country,” Brooke Buchanan, a Walmart spokeswoman, said in an e-mailed statement. “Two-thirds of Americans shop in our stores each month because they know they can find the products they are looking for at low prices.”

At a Feb. 1 gathering of Walmart managers, U.S. Chief Executive Officer Bill Simon said Walmart was “getting worse” at stocking shelves, according to minutes of the meeting obtained by Bloomberg News. Simon said “self-inflicted wounds” were Walmart’s “biggest risk” and that an executive vice president had been appointed to fix the restocking problem, according to the minutes.

http://www.businessweek.com/articles/2013-03-28/walmart-faces-the-cost-of-cost-cutting-empty-shelves#r=rss


I feel so bad for them..........NOT

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Walmart Faces the Cost of Cost-Cutting: Empty Shelves (Original Post) DainBramaged Mar 2013 OP
Remember Zayre? zipplewrath Mar 2013 #1
Same thing happened to Ames and Jamesway as did to Zayre, and Woolworths too. talkingmime Mar 2013 #3
deadmalls.com SoCalDem Mar 2013 #5
Let Walmart Die. That's one bailout I would fight hard against. nt onehandle Mar 2013 #2
so much for their great business model watch the sky Mar 2013 #4

zipplewrath

(16,646 posts)
1. Remember Zayre?
Thu Mar 28, 2013, 01:31 PM
Mar 2013

Before there were K-Marts, there were Zayre stores. I can remember watching the rapid decline of them as K-Mart grew. My recollection was that they couldn't compete in the "ultra low price" game and cut costs trying to keep up with K-Mart. They lost.

I've watched the same thing with K-Mart, trying to play the low cost game and losing to Walmart.

Empty shelves was one of the first signs that there was real trouble. That, and a staff too small for the store.

Now Walmart is headed that way. The ultra-low price game is a tough one and isn't tolerant of mistakes. Small changes in business models can mean the end of a chain like this. I wouldn't be surprised to see them reorganizing within 5 years.

SoCalDem

(103,856 posts)
5. deadmalls.com
Thu Mar 28, 2013, 05:20 PM
Mar 2013
http://mallsofamerica.blogspot.com/2006/07/northridge-mall.html

http://deadmalls.com/stories.html

Eventually the "market" gets saturated, and when people can no longer afford a shopping hobby, they cut back.

Many people are staring to figure out too, that cheap prices mean low wage jobs too.. If you sell everything super-cheap, you will hire low wage people to sell/stack/fold that cheap crap..it's a race to the bottom..

watch the sky

(129 posts)
4. so much for their great business model
Thu Mar 28, 2013, 05:13 PM
Mar 2013

too cheap to hire people to stock their items, nobody is going to want to go to a store that never has what a shopper is seeking to buy.

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