Was it a merry Christmas in Bentonville? We won’t have the official earnings release for Q4 until February 20, but retail analyst and shopper reports of disorganized, messy, understaffed stores during and after holiday shopping season certainly don’t bode well. These reports indicate that inventory management and out-of-stocks, caused by persistent understaffing in stores, have continued to plague Walmart.
For months, Wall Street analyst Brian Sozzi has photographed out-of-stocks (and yet more out-of-stocks), sloppy and disorganized aisles, and poor inventory management at Walmart stores. Here’s a selection from the Christmas shopping period:
Last week, a Walmart customer in Kentucky tweeted pictures of similar problems at her local store:
Walmart was supposed to have solved this problem last September, when it announced that, to improve customer service, the company would move 35,000 part-time workers to full-time status and elevate another 35,000 to part-time from temporary. Home office flack Kory Lundberg told Bloomberg that associates would keep their elevated employment statuses after the holidays were over.
Based on what Sozzi and the Kentucky Walmart customer have seen on the ground in stores, Walmart’s staffing measure was, at best, grossly inadequate. At worst, it was an empty promise, a PR stunt intended to smooth over a barrage of negative news reports about the condition of its stores , as well as Walmart associates’ own reports of staffing problems and calls for better scheduling practices.
We’ll probably never know for sure; Walmart is not one to provide actual data to support the public promises and proclamations it makes. But either way, it looks like Mike Duke is leaving the inventory/out-of-stocks problem for Doug McMillon to fix. And McMillon might have to work really hard to spin his first earnings report as CEO into something presentable.