Corporate Greed Could Mean The End Of Wal-Mart’s Dominance

walmartGoldman Sachs recently changed their advice on Wal-Mart stock from “buy” to “neutral,” and it wouldn’t be a surprise to me if they changed it to “sell” over the next few quarters. In fact, it seems like the heyday of the big box stores like Wal-Mart, Target and others may be coming to an end.

One of the appeals for stores like these is that you could get everything you need in one stop. I believe that this led executives to think that they could then ignore the need for customer service. At the same time, they could also please the shareholders by driving down labor costs, by having as few employees on hand as they could get away with and hiring part-time so as to avoid the requirement to pay benefits.

Understaffing and underpaying employees as Wal-Mart, Target and others do isn’t the sole reason for the decline of a business, but it is a big factor. In my years working in corporate America, I’ve often heard the phrase “do what’s right for the company.” This slogan is supposed to be a reminder to workers to keep the best interests of the company in mind. Yet far too often, a corporation fails not only to do right by the employees, but by the customer as well.

Take Wal-Mart as a prime example. I very rarely step foot in the store even though there’s one just minutes from my house and other retailers aren’t as convenient. Shopping on weekends or during the evening? Forget about it. Good luck getting in and out with everything you need in under 30-45 minutes when you have to deal with unstocked shelves and long waiting lines to check out, thanks to deliberate understaffing. The Walton family is worth more than almost half of America, it really wouldn’t hurt them to hire a few more people and perhaps pay them enough to care about customers.

So why are there often only 8 or 10 out of 50 open registers (if you’re lucky) on a Saturday afternoon or during the holidays? A few years back, I worked for Wal-Mart as an asset protection officer (a fancy word for undercover security). During my brief stint there, it was explained to me that management’s bonuses were based on meeting a number of goals, including sales and labor costs. From the store manager up through the district and regional levels, they were under constant pressure to have maximum sales and minimum labor costs. In turn, this created higher profits and greater dividends to the shareholders. Failure to please shareholders results in executives being forced out. We saw this happen with the naming of a new CEO, Doug McMillon in February, as well as the recent resignation of Bill Simon ahead of the 2nd quarter earnings report.

These shakeups aren’t confined to Wal-Mart alone:

Wal-Mart’s sales have declined for five straight quarters, leading to shakeups at the executive level.

Target’s CEO left earlier this year amid disappointing sales results and a data breach that affected millions of customers.

Several sectors are benefiting from widespread lack of interest in Wal-Mart and Target, according to Goldman.

Dollar stores, drug stores, and warehouse clubs “are taking share from broad-assortment retailers,” the analysts write. (Source)

Companies like Winco, Costco and smaller businesses are slowly but surely taking away the market share from Wal-Mart and other retail giants. After all, what good does having the lowest prices do you if customers are shopping elsewhere because the product isn’t on the shelf, or because it takes too long to check out?

Ideology aside, why would I want to purchase fishing tackle at Wal-Mart if there isn’t anyone in the section who knows anything about fishing, the lures I’m looking for aren’t stocked, and the fishing license machine is suspiciously broken yet again? Why would I purchase a TV or a cellphone from the electronics section if there’s only one employee there and they’re too busy with other customers to answer my questions?

Combine these frustrations with the ongoing spotlight on these companies over labor practices and you can see why they’re in decline. Personally, I’ll be happy to see the end of big box store dominance and more of the market share return to smaller businesses. The only question that remains is will these businesses acknowledge and mend the error of their ways, or will greed and unwillingness to change be their ultimate downfall?


Facebook comments

  • damienjaymz

    I live in Massachusetts and we have a situation going on up here. There is a regional supermarket chain called Market Basket that has an almost Shakespearean story going on. The CEO, Arthur T DeMoulas was recently ousted by his cousin, Arthur S DeMoulas. Arthur T put an emphasis on his employees and customers. He offered low prices for his customers (much lower than Shaws or Stop and Shop, and sometimes lower than Wal-Mart) and paid his employees a liveable wage with great benefits. He fostered a culture where the employees enjoyed their job, which made their customer service that much better. Now with Arthur S taking over, the company is in upheaval. Employees have walked off their job to protest and picket because they know that Arthur S has plans to sell the chain, raise prices and slash benefits in the interest of higher profits. For the last couple weeks deliveries haven’t been made, and the ones that do make it aren’t put on the floor because there are no employees to stock shelves. On top of that there are no customers there to by the products. This goes to show the difference between straight greed, and how a store can be profitable (the chain made over 4 billion dollars last year) and take care of its people. This is only a microcosm in that the majority of stores are up in New England, but it goes to show what people can really do to a company if everyone truly bands together for change. And how greed can truly destroy a company. Im sure the big, national chains are watching closely, or at least they better.

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    • Alec Stevens

      this shows me the American people have woken up to corporate greed and it will be broken down soon.

      • MichaelMyers Girl

        Late to the conversation,but I certainly hope you’re right. Corporate greed,is a big part of what’s wrong with this world,IMO.

  • Dawn Garrett

    After everyone reads this please think before cussing or bitching out the walmart staff. Its not our fault the company is crap. We cant help being understaffed i swear. Im a CSM, pregnant, under paid and just trying to get by, so please before you go off on me about lines or spit on me because youre waiting an extra 10 mins remember we cant control it anymore than you can.

    • 2Smart2bGOP

      I agree; the employees themselves are just trying to get by. My boyfriend and I walked into a Walmart one time; we couldn’t get out fast enough. I felt so bad for the employees we did see; every single one of them had a hopeless, helpless look about them. Will never spend a dime there, ever.

    • Cemetery Girl

      I don’t think anyone that hasn’t worked at a Walmart should complain about the staff. I used to think it was just the one I worked for, but it’s all of them (at least more of them than not.) I can remember some of the managers complaining that there was a cashier at 6 am (when the factories near us let out third shift and came over to cash their pay checks). I remember different managers wanting the same end caps set up with different things. I remember getting mandatory breaks or lunches at times so I would come back and have 10-15 mins left of my shift because there wasn’t enough people to cover it any other way. Work there for several months and you get why employees are the way they are.

    • Mallory

      Agreed. I’m a backup csm. Told how great I am at it. But they still keep hiring people above me. I personally think it’s because I’m 20 and people who are older than me keep asking for the position. I asked my manager- she said she hasn’t moved me because she doesn’t want to lose her best cashier. Awesome.

      • Sam Brosenberg

        Tell her that her best cashier might have to find a job elsewhere unless she gets a promotion.

  • Altreg01

    I always thought WalMart was privately owned by the Walton Family. I had no idea it was publically traded and like the author I go out of my way to avoid shopping there although there is one relatively close.

    • MichaelMyers Girl

      I also have one near me,that I ignore. I don’t care how much cheaper they are,I like quality,if I’m going to part with my money&junk-mart just does not have it. Nor do they have a clean,reasonably staffed,sanitary uncramped store. Cheaper,is’nt always better…

  • Eg Kbbs

    Add to your friendly “why would I buy from W if……”.

    To drive down costs, Walmart exerts tremendous pressure on their suppliers to cut costs. Even heard that they pressured a well-known quality frozen pizza company to cut the cost of their pizza by a few cents to decrease the number of pepperoni slices.

    In electronics, they gut devices to the barest.

    So why would I buy from W to get a cheaply built device, with inadequate power to do all but the most mundane tasks, and lacking quality ?

    • Trey Pollard

      ^^^I’ve experienced this personally and will never shop WM again. If you must get something from WM, do yourself a favor and check model numbers carefully, crossing your fingers and toes to ingratiate a little magic wouldn’t hurt your chances either.

  • bobmoon

    My girlfriend and I spend our money at Costco, Winco and a local market called Chucks Produce. The following is a list of companies that will NEVER receive one dime of our money mostly because of their treatment of their employees but also because they are not particularly good corporate citizens

    Applebees, Baskin-Robbins, Best Buy, Bob Evans, Boston Market, Buffalo Wild Wings, Burger King, California Pizza Kitchen. The Cheesecake Factory, Chuck E. Cheese, Cracker Barrel, Dunkin Donuts, Einstein Bros. Bagels, Hard Rock Cafe, Hooters, IHOP, KFC, Legal Seafoods, McDonald’s, Outback Steakhouse, P.F. Chang’s, Pizza Hut, Quiznos, Red Robin, Ruth’s Chris Steakhouse, Sonic, Subway, TGI Friday’s, Taco Bell, Uno Chicago Grill and Wendy’s Add to this Papa Johns, Whole Foods, Hobby Lobby and Denneys.

    These businesses have been in the news enough lately for a hell of a lot of reasons that I don’t have to go into a long explanation as to why, If you doubt my list just Google them and you’ll see why we’ve put them on our shit list.

  • William Fite

    I have no problem wit Walmart or Sam’s Club. They have been nothing but very helpful to me when I shop there.

    • usorthem3

      You support slavery then as all the products that used to be worthy are now made cheap in China sweat shop factories.

  • Ellen H.

    I detest Wal-Mart. We have one but I have been avoiding it for at least the past three years. I know people who have worked there who were treated poorly. Before Sam Walton died, it was a decent company, but his children, as is frequently the case, have ruined it with their greed.

  • Jim Bean

    It won’t make any difference. At the end of the day, buying at the lowest price enables every shopper to expand his buying power and, either that pressure will transition to the non-WalMart retailers or customers will decide to get by with less.

    • djtejas

      Not at all…the way Walmart goes about it drives down wages for people that work at Walmart AND the employees of companies that supply to them…

  • Jennifer Elisabeth

    Has anyone else ever noticed there’s the same Jim Bean, William Fite and Charles Vincent on every one of these stories in the comments? They must have no life at all.

    • djtejas

      And how they post in support of Walmart…

  • Brad Farnsworth

    Remember who the real enemy is here and it is time to take aim at the real enemy, Wall Street. That ponzi scheme that is driving this same business model in every publicly owned company has got to go. If they need money let them go to the bank and get a loan like everyone else instead of getting their unearned income off the backs of slave labor. Disgusting. Talk about who the real takers are.

  • I wonder if part of this trend — not the whole thing, of course — might have something to do with the way younger folks are gravitating away from suburbia and toward walkable neighborhoods in cities, where one is more likely to find small independent shops and less likely to find big box stores nearby.

  • Sweetmack

    I went to a super Walmart one night about 9:30 or so. When it came time for me to check out I had to pass about 10 counters where the lights was turned out and a cashier was waiting on people, or someone standing in the back of the line would inform me that they are the last person that the cashier was taking. I spoke to a manager on duty who informed me that those 10 cashiers were waiting on their relief. At this time its close to 10:00pm, and I thought that was a poor excuse to give me. I got so frustrated I left several items that I was going to purchase right in the isle and left the store. I sent an email to Walmart corporate headquarters. Someone did respond but didn’t make any effort to make me a repeat and satisfied customer. No perks, no gift certificates or anything. Although for a while I refuse to shop there anymore, I still find myself in there at least 3 times out of the week. As soon as I find somewhere else to get the items I shop for at below or comparable price, ill drop Walmart like a hot potato.

  • angelsinca

    The greed of the uber-rich Walton brats is extremely annoying. But, it’s the poor quality of the junk Chinese merchandise that keeps me away, along with the zombie-like throngs.

    • MichaelMyers Girl

      Well said&same here. I refuse to shop at junk-mart. Only took me a few times,to know better&go shop elsewhere. I want good quality stuff,not cheap junk. And a clean,unoverlycrowded,sanitary store in which to buy them.

  • Mitsy

    I work there part-time. Sad reality is that their goal seems to be
    lowering the number of work hours available to associates each year. So,
    they try to get the same amount of work out of people with as few hours
    as possible. In January most associates know hours will be cut as that
    is always the slow season for retail. But in Oct.? The store is busy
    with freight piled up & not enough hours to get it to the floor.
    This is coming from corporate (or so I’m told). They are making it so
    no one could get another part-time job because they want open
    availability & people cannot make it on the salary there alone. I
    really think this is going to bite them in the long run. The only
    people who will want to work there are high school & college kids
    and many do not have a good work ethic to begin with.

  • Andrew Cocke

    As far as the Chinese imports go, I don’t avoid walmart just for the fact everything there is made in China, in fact, a few things I’ve found in walmart are made in the USA again. The fact is, virtually every retailer, from the big box stores to the mom and pops require Chinese imports for two reasons, first and foremost, China is the only country where these items are being produced, and secondly, because cheap Chinese child labor is the only way anyone can compete in the west.

    No, I avoid walmart for the simple reason, that I loathe the walmart shopping experience. Everything from trying to find a place to park, to getting in line with people buying socks, tires, doll houses, and cell phones, when all I wanted was to zip in a get a loaf of bread. I also don’t like how walmart dictates what the American consumer “consumes”. We (the consumers) don’t decide what we want on walmart shelves, no, computer algorithms, and main frame super computers decide what’s “trending” in good old ‘merica, and that’s what we will buy. Why? Because walmart is designed and programmed to move large amounts of inventory.

    Remember: In corporate America, we are simply “consumers”, we “consume” stuff. We don’t produce, we simply consume, they don’t care where the money came from, as long as we consume, consume, consume. In their eyes, we don’t have hearts, or souls. We are just mindless, zombie, “consumers”, that will step over our own mothers to get the latest trend.

    And their shareholders have bet the farm on that.

  • Melissa

    It is amazing to me at how employees think that just because of pay and work conditions they have the right not to care about the customer. No matter what it boils down to do you care about what you are putting your name on. The way I see it is no one but you can put your integrity on the line. We as employees should stop and realize that the customer has no part in any of this. Thing is the customer comes in in a bad mood because they know there will be no one to help them and that there will be long lines. I am glad to be a friendly face in an unfriendly retail setting. I wish my fellow co-workers felt the same. People it is not the customers fault yet the customer is made to suffer along with us talk about things that are not fare…….

  • MichaelMyers Girl

    Most companies now days,deliberately make things less effective,less long-lasting,etc&with not so great quality materials. Just mass-produced junk,with little to no genuine good quality. Everything from bug sprays&furniture(ikea is terrible junk,but a good example),to your vitamins,shower hooks,glue,electronics,you name it…if it works TOO well/lasts TOO long,they pull it off the shelves. If you care to look&observe&think beyond what the commercials,companies&ads tell you to,you can see it. Should be obvious,in fact. Therefore,things don’t work as well as they could,break more than they should&faster&YOU wind up spending more of your hard earned money,than you should,replacing/repairing all that crap. IMO,THAT is the epitome of corporate greed. People should speak with their wallets&start demanding better quality at reasonable prices.(yes,BOTH quality&reasonable prices at the same time,IS possible&should be more common.) Saying ‘no’ to wal-mart(junk-mart,A.K.A. the consort of corporate greed),is a great start. Stop settling for junk,just because it’s cheap. Cheap,does not usually mean a ‘good deal’ ,or ‘great buy’…often,saving a dollar now,costs you more,later. Just my opinion&something to think about.

  • Walter Clark

    Walmart should hire more people for each department in their stores, to reduce time to wait, including cashiers, hardware, electronics, and sporting goods, so lines can move faster. If Walmart keeps going like this, someday in the future, just like what happened to other stores, all or some Walmarts would share that same fate, by having to close down, or even go out of business, just like what happened with some other stores like JCPenney, Sears, K-mart, or Macy’s.
    Layoffs of some Walmart associates, may also be the factor (labor costs)