The Walmart Saga: Empty Shelves, Full Exec Pockets

I've been debating about writing about Wal-Mart for a while now for one very good reason:  If I write as a knowledgeable shopper, people will know I shop at Wal-Mart.  Chicken of me, I know, but some of my best friends, relatives and acquaintances refuse to shop at Wal-Mart, and they don't like to be reminded that I'm not one of them.

I shop at Wal-Mart.  Not always, but often enough to be considered a Wal-Mart shopper. I will make no excuses for shopping there because I know that every one of my excuses can be shot down.  Sometimes when I'm walking into a Wal-Mart I think about all the storekeepers who will hate me for what I'm about to do and I beat them to it:  I hate me, too.  But I go in.

So when I write that I've seen empty shelves in many Wal-Mart stores, you should know that I know what I'm talking about.

Today Bloomberg News published an article about Wal-Mart's empty shelves and, while I wasn't completely shocked at the scope of it, I did feel vindicated, considering the lengths I've gone to to get the managers of the various Wal-marts to understand how irritating it is to go looking for a list of things and not find even one of them.

For example, my morning must-have to go along with my essential mug of coffee is a two-square slab of Nabisco Nutter Butter Patties.  Our particular Wal-Mart up north stopped stocking them and when I went looking for the person responsible I was told that not enough people were buying them, so out they went during the periodic product purge. They were kind enough to order a case just for me, and what I didn't want out of the case they would put on the shelves and leave them there until they were purchased, either by me or some other Nutter Butter nut.  Fine.  Solved.  (No other store around sold them.  Really.  I looked.)

Wal-Mart also makes an excellent blue cheese dressing, sold in the refrigerated section of the produce department.  It's like finding gold when we see them stocked, which isn't very often.  You would think they would at least pay attention to stocking their own brands.  But, no.

Empty shelves are a given at every Wal-Mart now and the reason, we've finally confirmed (but should have known), has more to do with a scaling down of employees than it does with incompetent managers.  Not every manager of every store could be that incompetent.  No, this is about greed.  The Walton Companies rake in so much money entire countries (including this one) are green with envy, yet when it comes to money and the Waltons, there's no such thing as sharing without a fight.

This from the Bloomberg piece (emphasis mine):

 Adding five full-time employees to Wal-Mart’s (WMT) U.S. supercenters and discount stores would add about a half- percentage point to selling, general and administrative expenses, according to an analysis by Poonam Goyal, a Bloomberg Industries senior analyst based in Skillman, New Jersey. Assuming the workers earned the federal minimum wage and industry standards for health benefits, the added costs would amount to about $448 million a year, she said. In the year ended Jan. 31, Wal-Mart generated $17 billion in profit on revenue of $469.2 billion.

I, an admitted Wal-Mart shopper, have long despised Wal-Mart's employee practices.  That's my dilemma and my shame.  In my little corner of the country there are no Targets, no Kohls, no Costcos, no Meijers.  I wish there were, but there aren't.  But there are smaller supermarkets, other stores that don't offer one-stop shopping.  And there is the internet.

So Sayonara Wal-Mart.  Raspberries to you.  And as a parting shot, here's how Costco does it and why it would be worth the $50 a year it costs to join if there was one in the neighborhood:

Costco CEO Craig Jelinek openly supports raising the minimum wage to $11.50 an hour, “At Costco, we know that paying employees good wages makes good sense for business. We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low. An important reason for the success of Costco’s business model is the attraction and retention of great employees. Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage.”

 So, okay, most of Costco's goods come from China and other foreign countries, as do most if not all the goods in every other store, bulk or otherwise, but Costco gets it.  They understand that their success wouldn't be nearly as sweet if their employees weren't sharing in it, too.

Trader Joe's is heading that way, too.  (Though TJ gets demerits for holding out for years before finally relenting and agreeing to give Florida tomato workers a raise of a penny a pound, and supporting better working conditions for those poor, poor, desperately poor pickers.  I mean. . .really? Years?)

But, here. . .

Many employers believe that one of the best ways to raise their profit margin is to cut labor costs. But companies like QuikTrip, the grocery-store chain Trader Joe's, and Costco Wholesale are proving that the decision to offer low wages is a choice, not an economic necessity. All three are low-cost retailers, a sector that is traditionally known for relying on part-time, low-paid employees. Yet these companies have all found that the act of valuing workers can pay off in the form of increased sales and productivity.
"Retailers start with this philosophy of seeing employees as a cost to be minimized," says Zeynep Ton of MIT's Sloan School of Management. That can lead businesses into a vicious cycle. Underinvestment in workers can result in operational problems in stores, which decrease sales. And low sales often lead companies to slash labor costs even further. Middle-income jobs have declined recently as a share of total employment, as many employers have turned full-time jobs into part-time positions with no benefits and unpredictable schedules.

So way to go, Wal-Mart!  You've finally figured out a way to make yourselves Numero Zilch!  It took a while but take a bow.  A long bow.  Hold it.  Just a little longer. . .