Even for Wal-Mart, Cost Cutting Has Its Limits

Wal-Mart, the world’s largest retailer prides itself on its cost efficiencies and the resulting low prices. Hence it’s slogan: “Save money. Live better.” Its aim is to always be the lost-cost, low-price leader.
But, even for Wal-Mart, costs can sometimes be cut too sharply, such as with the recent case of Wal-Mart’s reducing its store staffing.
As Stephanie Clifford reports for the New  York Times: “Michelle Obama visited a Wal-Mart in February to extol the fresh, healthy food in the company’s grocery aisles. But Wal-Mart, Ms. Obama’s corporate partner in a campaign to make food healthier and more affordable, has been running into problems with food that is not so fresh. Wal-Mart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Wal-Mart managers show the company grappling with low customer confidence in its produce and poor quality. ‘Lose Trust,’ reads one note, ‘Don’t have items they are looking for — can’t find it.’”
Clearly, Wal-Mart will have to remedy this situation.
Click the image to read more of Clifford’s story.

Photo by Nadav Neuhaus for the New York Times

 

 

 

This entry was posted in Part 1: Overview/Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 7: Communicating with the Customer and tagged , , , , , , , , , . Bookmark the permalink.

1 Response to Even for Wal-Mart, Cost Cutting Has Its Limits

  1. Pingback: Wal-Mart’s Green Dot Program for Shelf Stocking | Retailing: From A to Z by Joel Evans

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