On-the-ground Walmart store associates have said for years now that systematic understaffing is at the root of the company’s operational problems. After several quarters of weak earnings, bad press, and reputational problems stemming from understaffing, are Walmart execs finally—finally!—acknowledging the severity of the understaffing problem and taking steps to solve it?
The American Customer Satisfaction Index (ACSI) retail report for 2013, released last month, contained bad news for Walmart: The company ranked last in customer satisfaction among discount/department stores, as well as among supermarkets:
The breakdown of Walmart’s “productivity loop” is catching up to the company again, as equities research firm Wolfe Research cited the effect of persistent understaffing among three reasons behind its downgrade of Walmart from “market perform” to “underperform” in a research report this week.
There wasn’t much good news for Walmart in its Q3 earnings release last week, as the company reported negative same store sales for the third consecutive quarter, a decrease in customer traffic, and inventory growth that outpaced sales growth. Executives again pinned the blame on “economic headwinds and fiscal uncertainty,” but this time, for good measure, they also threw in some concern trolling about the Affordable Care Act.
More takeaways from last week’s analyst shindig:
Last Tuesday, Walmart brought Wall Street analysts down to Arkansas to get them up bright and early and show them PowerPoint presentations for hours (aka the “20th Annual Meeting for the Investment Community.”) Our invitation must have been lost in the mail, but we’ve sifted through the transcripts, news reports, and PR spin, and have some takeaways of our own. Here’s the first set:
While it’s usually a good rule of thumb to avoid internet comments sections, sometimes the internet can surprise you. The comments sections of an article on The Motley Fool published late last week actually contained interesting commentary on the trouble with Walmart’s “productivity loop” and the company’s ongoing labor concerns.
For months, news report after news report after news report has identified systematic understaffing as the reason for Walmart’s ongoing out-of-stocks problem. (That problem, in turn, has been contributing to low customer confidence, weaker-than-expected sales results, and bizarrely-rigged audits.)
“There’s no substitution for boots on the ground in the store. No substitution. You can have all the technology you want but if you don’t get it out of the back room to the floor when the customer needs it, then that’s a lost cause.” – Drake Jackson, Category Manager (retired), Walmart
