Seeking Alpha

New Wal-Mart U.S. CEO faces a long list of pressing problems

  • Wal-Mart (NYSE:WMT) hasn't been short of excuses for its dismal performance of late: in Q1 it was the weather, before that it was a reduction in customers' food stamp benefits, and before that it was the challenging global economy - when it reports Q2 earnings in three weeks, the excuse will be the guy who's no longer around, as former U.S. head Bill Simon was given the boot this week.
  • Analysts say WMT is getting hammered by cheaper and more convenient options such as online (think AMZN) and dollar stores (FDO, DG); some say the most crucial action for new man Greg Foran is to pivot away from the supercenter focus and continue growing the small-store footprint, but that could risk customers' need to visit larger stores and make additional, higher-price impulse purchases.
  • Foran's most pressing need may be just getting stuff on the shelves: WMT has cut its U.S. staff by ~20K since 2008 while adding 650-plus stores, resulting in merchandise piling up in aisles and in the back of stores because there aren't enough workers to restock the shelves.
  • As if Foran doesn't have enough on his plate, he will take over the reins of Wal-Mart U.S. on Aug. 9, during the back-to-school rush and not far ahead of the winter holidays.
Comments (51)
  • Gary J
    , contributor
    Comments (3857) | Send Message
     
    Here is Walmart's short list of pressing problems - Amazon
    26 Jul, 08:31 AM Reply Like
  • Mort19
    , contributor
    Comments (181) | Send Message
     
    How about putting back up your geezerish picture but this time in your Amazon Bimmer.

     

    That would be way cool Gary J.
    26 Jul, 09:11 AM Reply Like
  • Zeus2012
    , contributor
    Comments (697) | Send Message
     
    Is this the same guy who's been pumping $WFM? Lol.
    26 Jul, 10:15 AM Reply Like
  • Gary J
    , contributor
    Comments (3857) | Send Message
     
    Back by popular demand!
    26 Jul, 02:13 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (927) | Send Message
     
    which company reported massive losses this quarter and will do so again next qtr? Amazon or WMT ?
    26 Jul, 04:21 PM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    Until Amazon starts having to collect sales tax in every state, and investors start demanding actual profits from Bezos.

     

    As stated below me, WMT's biggest problem is WMT. Hopefully the leadership change will bring supply-chain management that is sorely needed.
    26 Jul, 06:34 PM Reply Like
  • LouieXIV
    , contributor
    Comments (95) | Send Message
     
    Wal-Mart would have zero profit if they paid their 2.2 million workers a fair wage. Unions will take hold at Wal-Mart and that will be a death blow to Wal-Mart.
    27 Jul, 08:42 AM Reply Like
  • cashewking
    , contributor
    Comments (308) | Send Message
     
    One of the problems Walmart has is that there is no one in the store to talk to you or get assistance. they should have a manager walking each department who can assist and answer questions. Secondly, their product selection is just junk. It is one thing to be cheap but quite another to put shoddy clothing on the floor that no one wants. If they up graded their quality across the board but still people felt they were getting a good value they would do much better. I went in to buy a pair of gym shorts and didn't want to pay 37 dollars for Nike in our local store. I could buy gym shorts at Walmart for 9 bucks but they were the worst crap imaginable. If they had something nice for 22 bucks I would have bought it.
    27 Jul, 09:09 AM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (367) | Send Message
     
    They should look at Kroger as an example.
    27 Jul, 09:44 AM Reply Like
  • ReligiousWacko
    , contributor
    Comments (927) | Send Message
     
    Right .. and Amazon warehouses are great places to work.
    http://huff.to/1lK0D9a
    http://huff.to/Rn7TQj
    27 Jul, 01:40 PM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    "Wal-Mart would have zero profit if they paid their 2.2 million workers a fair wage. Unions will take hold at Wal-Mart and that will be a death blow to Wal-Mart."

     

    AMZN has 0 profits and they still don't pay workers a "living wage." And they make their workers run around in sweatbox package warehouses without proper breaks.

     

    TGT, MCD, YUM etc. don't pay "living wages" either. Besides, we all know that a "living wage" exists in leftist liberal la la land, while reality is very different.

     

    Go stand on a soapbox somewhere else.
    27 Jul, 02:18 PM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    Amazon's sick brutality manages to be worse than Wal-mart..... as said by a left-leaning magazine, Salon!

     

    http://bit.ly/MHWR50
    27 Jul, 02:27 PM Reply Like
  • frosty
    , contributor
    Comments (691) | Send Message
     
    Or it could be WMT has simply peaked out, like other retail stars of the past (Sears, Penney, Montgomery Ward, Kresge/Kmart, . . .) and now begins its slow decline. We recently visited the Phoenix area and within a couple of miles there were 2 Walmarts, one huge, the other only very large. Two Walmarts competing against each other. And there may have been more nearby.
    26 Jul, 08:38 AM Reply Like
  • investingInvestor
    , contributor
    Comments (1319) | Send Message
     
    frosty, truer words have never been spoken about Walmart.

     

    I have been studying Walmart vis a vis Costco and Amazon. Sam was a general who strategically conquered all the rural markets. In the process, small town America was drained of its vital commerce and tax base. All the Walmart stores strategically located outside town paid no town taxes. Soooo sad.

     

    Walmart very well may be in a persistent downward spiral. Tooooo bad.
    27 Jul, 04:01 PM Reply Like
  • $vix
    , contributor
    Comments (430) | Send Message
     
    I recently set up a play area for my kids at one of my office buildings. Bought a few bean bags, groovy rugs, swivel chairs and a convertible couch.

     

    All the items were bought at Walmart online and the cost was over $300 less than amazon. The order process was impeccable, the shipping was free ( with no annual charge) and the items arrived within days of my order. Each item came with an easy return label.

     

    I could not have asked for better service and the cost on the items were far less than amazon.

     

    That said, however, going into a physical Walmart store several towns over from where I live is another story. The store needs a makeover, the product displays are horrendous and the employees are from another planet. Walmart's main problem is not amazon, its Walmart.

     

    Their total sales make amazon look like a peanut. Walmart needs to revitalize their stores, close down the non performing ones and hire more capable people. They need to focus on their online operations and grow that part of the business.

     

    Walmart has the potential to really do some damage to the other online operations if they'd use their resources to streamline physical retail and really expand their online operations. Walmart is standing in the way of Walmart
    26 Jul, 09:15 AM Reply Like
  • wyostocks
    , contributor
    Comments (7703) | Send Message
     
    vix

     

    "Walmart's main problem is not amazon, its Walmart."

     

    Well stated. As for the employees, I am always amazed at the difference between the employees at Wal Mart and Target. Why is that?
    26 Jul, 09:25 AM Reply Like
  • micium
    , contributor
    Comments (116) | Send Message
     
    Some businesses never learn. Good people are cheap; cheaper than less capable personnel who cost the company money in mistakes and inefficiencies.
    26 Jul, 11:28 AM Reply Like
  • oyeabog
    , contributor
    Comments (2) | Send Message
     
    Target employees are paid more and not worked as heard ,never see as much traffic in a target store vs walmart
    26 Jul, 12:15 PM Reply Like
  • kjakich
    , contributor
    Comments (3) | Send Message
     
    Yea, don't forget though, amazon is not limited to n. America.
    27 Jul, 03:40 AM Reply Like
  • LouieXIV
    , contributor
    Comments (95) | Send Message
     
    I remember when Wal-Mart advertised Halloween candy at really low prices and a competitor's store manager came in and bought all of it and cleaned out Wal-Mart. Customers flocked to his store for it. There is no loyalty when all you offer is price.
    27 Jul, 08:53 AM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    "Target employees are paid more and not worked as heard ,never see as much traffic in a target store vs walmart"

     

    False

     

    http://bit.ly/1lK673J
    27 Jul, 02:21 PM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    TGT employees make less:

     

    http://bit.ly/1lK6Amv
    27 Jul, 02:25 PM Reply Like
  • Jason Tillberg
    , contributor
    Comments (1236) | Send Message
     
    This store does not uplift humanity. It brings humanity down.
    26 Jul, 09:43 AM Reply Like
  • Tschurin
    , contributor
    Comments (315) | Send Message
     
    Dear Ed: It's a cheap shot to label Walmart's comments about the effects of the economy and benefits on its customers as merely an "excuse". Perhaps you should take a look at real median household income in recent years.
    26 Jul, 10:09 AM Reply Like
  • LouieXIV
    , contributor
    Comments (95) | Send Message
     
    That does not bode well for Wal-Mart. Amazon's customers are more affluent and educated than Wal-Mart customers. I prefer Costco stores.
    27 Jul, 08:48 AM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    " Amazon's customers are more affluent and educated than Wal-Mart customers."

     

    Yet they don't pay a "living wage" Enjoy being a hypocrite?
    27 Jul, 02:22 PM Reply Like
  • PeterXLX
    , contributor
    Comments (60) | Send Message
     
    Amazon pays it's grunts 50% more than Wal-Mart.
    28 Jul, 10:00 AM Reply Like
  • Shaduc
    , contributor
    Comments (1126) | Send Message
     
    PeterXLX:

     

    Can you cite a resource for those compensations?
    28 Jul, 10:13 AM Reply Like
  • PeterXLX
    , contributor
    Comments (60) | Send Message
     
    Its called the Internet and compensation related sites.
    28 Jul, 11:00 AM Reply Like
  • Shaduc
    , contributor
    Comments (1126) | Send Message
     
    sorry, i'm in China and google is blocked!

     

    Don't like refiguring out yahoo (lousy results), bing, but operated from sg is worse ...
    28 Jul, 11:12 AM Reply Like
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    "Amazon pays it's grunts 50% more than Wal-Mart."

     

    Great. it will cover the cost of the ambulance ride when they overheat in those warehouses

     

    http://bit.ly/MHWR50
    28 Jul, 11:44 AM Reply Like
  • rogerlbeck@att.net
    , contributor
    Comment (1) | Send Message
     
    If you do much shopping at Walmart or have a friend that works there like I do, you know all these problems to be real and destructive. My friend who works in grocery laments about the unloaded trucks, merchandise sitting in the aisle, and the don't-care, often lazy supervisors. He also laments at the constantly shifting work schedules: sometime 40 hrs, sometimes 30 hours. These people on the front-lines can barely afford to live on 40 hours pay! so they soon quit.

     

    This company needed new management long ago! The first order of business for the new guy should be to clean house in retail store operations and get people who understand that how to move goods and treat people.
    26 Jul, 10:54 AM Reply Like
  • nikkor
    , contributor
    Comments (50) | Send Message
     
    The truth is that Walmart wants customers who have extra income and employees who can live on nothing. Until we break this cycle as a nation, I fear America and Walmart will be in decline.
    26 Jul, 11:13 AM Reply Like
  • oyeabog
    , contributor
    Comments (2) | Send Message
     
    Walmart will always be strong due to money savings. People always complain but always go back ,cause they cant afford Target. Iam cheap so I love Walmart you have to take it for what its worth. Better service will Always cost more
    26 Jul, 12:16 PM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (367) | Send Message
     
    And yet, they get the people of walmart.

     

    http://bit.ly/npevuK
    26 Jul, 12:38 PM Reply Like
  • cashewking
    , contributor
    Comments (308) | Send Message
     
    And that my friend is why they are doing so poorly !
    27 Jul, 09:11 AM Reply Like
  • User 16393382
    , contributor
    Comment (1) | Send Message
     
    Very well pointed! I have been saying exactly the same.
    28 Jul, 12:49 AM Reply Like
  • micium
    , contributor
    Comments (116) | Send Message
     
    1. Some businesses never learn. Good people are cheap; cheaper than less capable personnel who cost the company money in mistakes and inefficiencies but are paid less.
    2. We travel a lot. In one Wal-Mart I asked where are all the clerks? The associate said they would hire more but they can't pass the drug test. That says a lot about that area and the wages offered.
    3. Over a hundred years ago, the mighty titans of business got bigger and stronger by eliminating the competition, either legally by buying them out, or by destroying them via criminal behavior. Still today, some are smart enough to at least eliminate the competition by buying them out, as has been done in the eye frame and eyeglass business, which is why glasses are so expensive and no antitrust action has been taken by our illustrious government.
    4. Wal-Mart had the opportunity to buy out one of the dollar store type chains but declined. Maybe Target would do it, but they can't even handle their own business competently.
    5. Where has all the competency gone? I was a bean counter, but too many bean counters make poor business decisions as they only look at numbers. Are the wrong people in charge? Most and foremost are great merchandisers. What companies have some?
    26 Jul, 11:39 AM Reply Like
  • yblarrr
    , contributor
    Comments (851) | Send Message
     
    A big shake up is obviously needed and needed in a big way!
    All these retailers should be out-amazoning,amazon,I know they will probably take
    some losses,but you have to pound your competition into the ground. Most have
    websites already,just lower the prices and offer free shipping.
    26 Jul, 12:24 PM Reply Like
  • obieephyhm
    , contributor
    Comments (1567) | Send Message
     
    I believe there is more psychology to this than meets the eye. Walmart has been 'bottom-feeding' in both personnel and goods for a long time. They are no longer the price leader in cheap goods but carry far more cheap crap just to keep prices down. They are going the way of Kmart and Pamida and for exactly the same reasons.

     

    More important, to me, is hey have ruthlessly driven their staff into low wages and driven small businesses in small towns out of business for trivial increases in market-share and A LOT of ill-will has been building towards them for decades.

     

    I don't shop there. I don't invest there. Don't like the way they do business and the trickery that is frequently employed to get you to buy something that is listed 'on sale' but rings up at the cash-register at a higher price (most people do not notice this). I would rather spend more through Target or Amazon than deal with them.
    26 Jul, 12:49 PM Reply Like
  • mydogmoe
    , contributor
    Comments (326) | Send Message
     
    If I have a list of basic items that are non perishable I wouldn't think about driving past a DG to shop at a WMT. Brand names and great DG brands that are as cheap if not cheaper and a much simpler shopping experience. FDO and FRED are also good. Some of the a Fred's sell prescription as well as over the counter drugs. They are driving WMT crazy...
    26 Jul, 01:44 PM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (367) | Send Message
     
    I buy everything I can at Kroger. They are a union shop.
    26 Jul, 02:06 PM Reply Like
  • devlau20
    , contributor
    Comments (71) | Send Message
     
    Here's the Walmart experience in Alexandria, VA…..invariably empty shelves on the most popular products….pallets blocking aisles….insufficient parking….10-15 minute waits at cashiers lines…."managers" responses to the above: "Watchu want man? If you don't like it go to Safeway." Hiring at our 2 stores….0….except for temporary Xmas hires. Attitude by staff towards customers….beyond IGNORANT.
    26 Jul, 02:56 PM Reply Like
  • cashewking
    , contributor
    Comments (308) | Send Message
     
    devalu20. You hit it perfectly they should read this whole board and wake up.
    27 Jul, 09:14 AM Reply Like
  • Tadpoles_UK
    , contributor
    Comments (494) | Send Message
     
    I know a few Wal-Mart folks that work both at the home office in Bentonville and at the store level. Wal-Mart has lost its focus on the customer. They will all say that they haven't, but that's what they would say. The downward trend started all the way back when K-Mart filed for bankruptcy over ten years ago, and middle management started declaring victory.
    The results are dirty stores, stock-outs, and long check-out lines. I don't ask for help from a W-M associate any more, because mostly what they provide are blank stares. I have a friend that is a Supercenter asst. manager, and finding able and qualified employees is his toughest challenge.
    26 Jul, 06:43 PM Reply Like
  • henrobrice
    , contributor
    Comments (32) | Send Message
     
    Amongst all this haterade lies a great opportunity for Wal-Mart to get back on track. Its demise is being greatly exaggerated. Online retailing will make brick and mortar stores obsolete, they said. Look at Amazon.

     

    In the fair chance that things will go downhill a bit or churn the next couple years, Wal-Mart is going to be a solid pick. With some of brightest retailing minds/talent in the world, this is a pick for long term investors who can overlook a bad experience in Alexandria, Virginia and see the benefit this company provides the U.S.

     

    Like how they hired my veteran friend who wasn't getting looks from anywhere else. Or how Wal-Mart provides low cost goods in my area where it is often expensive to be poor.
    27 Jul, 01:28 AM Reply Like
  • others care
    , contributor
    Comments (2) | Send Message
     
    Until companies like Wal -Mart start listening to who puts butter on there bread things won't change can't talk out of two sides of there mouth .Customers are the paycheck and long term employees need to be taken care of so that business will return so communites like the home town feel . Let the store managers have more of a active roll of merchise purchasing because they known the customer & the area smiles makes pay checks and jobs that pay well .
    27 Jul, 03:30 AM Reply Like
  • nottheboss1
    , contributor
    Comments (34) | Send Message
     
    I shop frequently at two Walmart stores in TN and one in FL. I'm pleased with all of them. Yes, they sometimes don't have in stock some item on my list, but that's hardly surprising in view of the tremendous variety of items they carry. Yes, employees often are not chatty types, but I don't go shopping to chat with store clerks. Both Walmart and Target are self-service stores, so I don't get, or expect to get, customer service at either of them. Yes, the checkout lines are a little longer at Walmart, but that's probably because Target has so few customers. The Target store closest to me has been open about 10 years, and traffic is still very sparse. I don't see how they afford to stock all that inventory, pay the rent and utilities and employees, etc., with the low volume of sales they're ringing up. Any time I think about buying bargain-priced Target shares, I am dissuaded by my own negative reaction to Target's higher-priced merchandise and lower-traffic stores. However, perhaps when (if) good economic times return for the middle class, Target will succeed in attracting a lot of customers who just like to pay more for one reason or another. I'm going to wait until I see that happen.
    27 Jul, 08:54 AM Reply Like
  • Youngbloodf
    , contributor
    Comment (1) | Send Message
     
    Interesting, the Walmart I go to here in TN often has items that the local Publix store does not carry. I've also had a great experience with buying prescription glasses there i.e. the workers were friendly, helpful and efficient, the frame selection and final price much better than Costco.
    27 Jul, 03:35 PM Reply Like
  • husted.chris@gmail.com
    , contributor
    Comment (1) | Send Message
     
    Walmart can solve its problems by hiring back its people. The people there are worked to death. They can't finish anything because everything is only finished to a good enough level before moving on to the next crisis of the moment. There are not enough people to get things done right in 40 hours. Upper management only sees numbers and doesn't understand. They only see the cost of hiring people not the added value that stocked shelves and other correctly completed retail tasks like accepting on hand changes could do for them. (Admitting that you have missing or miss counted merchandise means taking a loss. That cuts store profits. It looks bad and its policy to deny changes. That further screws with proper merchandise flow.)
    28 Jul, 12:48 AM Reply Like
  • devlau20
    , contributor
    Comments (71) | Send Message
     
    Walmart, Alexandria, VA (7/27/14 - 7PM). Used the rest room only to discover an open drug transaction was taking place. Sought out the cashier manager nearby, who responded for me to call 911, because it "ain't my problem" then adding that
    she didn't see "nothin." Left the store frustrated only to find a car in the process of being broken into in the parking lot while Walmart employees on their smoke break egged on the thieves. Walmart is a hopeless case. A bottom feeder….dirty….unstocked shelves….employing the lowest echelon of society. In Alexandria, it is an unsafe place to shop after dark.
    28 Jul, 09:34 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|