Walmart sees $3B opportunity in fixing out-of-stocks
Early last year when Bloomberg first broke the news that Walmart faced severe challenges with inventory in its stores, a company spokesperson challenged the accuracy of the reporting. In essence, the retailer suggested that low stock levels in some locations were isolated cases and not reflective of the company as a whole. Now, the news service reports that Walmart executives at a company meeting acknowledged the chain has a problem with its inventory and that fixing it represents a $3 billion opportunity.
To address the inventory issue, Walmart plans to add labor hours. Before the last Christmas holiday season, the retailer made a public relations splash when it announced it was moving some 35,000 part-time associates to full-time and another 35,000 temporary workers to part-time. The company said those workers would maintain their hours after the holidays.
Walmart is looking to reduce the number of slow movers on its shelves to make it easier to manage its inventory. According to remarks attributed to Duncan Mac Naughton, chief merchandising officer at Walmart, the retailer’s goal is to limit inventory increases to half its sales growth rate this year.
- Wal-Mart to trim inventory to increase sales – Bloomberg News/The Fort Wayne Journal-Gazette
- Does Walmart Have Restocking Problems? – RetailWire
- Walmart Goes On a Hiring Spree – RetailWire
Do you see Walmart’s out-of-stocks problems as primarily a labor or SKU/space management issue? What would it mean to Walmart’s competitors should it realize the $3 billion opportunity it has identified?