Q: “WHERE ARE ALL THE CUSTOMERS? AND WHERE’S THEIR MONEY?” A: IN THE WALTONS’ POCKETS.
Internal Walmart emails obtained by Bloomberg News revealed that Walmart’s January and February sales were significantly lagging, with one executive writing that sales results in the first half of February were “a total disaster” and “the worst start to a month I have seen in my ~7 years with the company.” The company is apparently pinning the blame on delays in tax refunds and the payroll tax increase, alongside the effects of the still-weak economy.
But according to other documents obtained by Bloomberg, Walmart executives recognize that slumping sales also reflect the company’s continuing difficulties in keeping store shelves fully stocked. According to the minutes of an executives’ meeting in February, the issue—identified by Walmart store associates in October 2011, and linked to chronic understaffing of stores—is only “getting worse.”
Even after these documents were released, fourth quarter results from FY 2013, covering last year’s Christmas shopping season, disappointed investors as well: Despite the company’s claims that the shopping season kicked off with “the best Black Friday ever,” customer traffic actually declined for the first time in a year; same store sales, a measure of retail health, were well below Wall Street analyst predictions; and earnings per share figures were boosted by an unusually low tax rate and an increase in share repurchases.
So how did Walmart’s Board of Directors respond to the bad news about sales? A week after Bloomberg published excerpts of the leaked emails, they voted to increase dividends by 18 percent, one of the largest increases in the company’s history. So at a time when the company’s top lines are suffering because its core customers have less money in their pockets, the people in charge decided to respond by shoveling more money into their own. The dividend increase works out to a total of $5.2 million more for the 17 Walmart directors and $467 million more for the Walton family, who is already estimated to be worth more than $115 billion.
Meanwhile, many of the people who actually supply the goods to Walmart stores and make Walmart stores run every day—workers along the supply chain and Walmart store associates—continue to live in poverty. In February, Business Insider reported that Walmart was the employer of the most low-wage workers in the U.S.
WHAT DO WALMART ASSOCIATES SAY ABOUT THE COMPANY’S TROUBLES KEEPING THE SHELVES STOCKED?
- Bloomberg spoke with Evelin Cruz, a nine-year Walmart associate who is a department manager in Southern California, about Walmart’s in-stock troubles. “There are gaps where merchandise is missing,” she said. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”
- Store associates affirm that Walmart’s chronic understaffing and delays in replenishing merchandise are affecting sales. “[Management] let[s] the merchandise phase out but nothing new comes in to replace them,” Cruz added. “What are customers supposed to buy? All of this is affecting customers. You see people walking out because they’re looking for anyone to help them and there’s no coverage.”