While unemployment continues to plague the country in certain areas, it seems that Wal-Mart (NYSE: WMT) faces a different problem altogether – not enough workers.
According to Bloomberg research by Renee Dudley, Wal-Mart doesn’t have enough bodies to restock the shelves, according to interviews with store workers. In the past five years, the world’s largest retailer added 455 U.S. Wal-Mart stores, a 13 percent increase, according to filings and the company’s website. In the same period, its total U.S. workforce, which includes Sam’s Club employees, dropped by about 20,000, or 1.4 percent. Wal-Mart employs about 1.4 million U.S. workers.
The staffing issues are not universal in the Wal-Mart locations, as some are significantly more strained than others. At the supercenter across the street from Wal-Mart’s Bentonville, Arkansas, home office, salespeople on March 14 handed out samples of Chobani yogurt and Clif Bars. Thirteen of 20 registers were manned — with no lines — and the shelves were fully stocked. Three days earlier, about 10 people waited in a customer service line at a Wal-Mart in Secaucus, New Jersey, across the Hudson River from New York, the nation’s largest city. Twelve of 30 registers were open and the lines were about five deep. There were empty spaces on shelves large enough for a grown man to lie down, and a woman wandered around vainly seeking a frying pan.
Wal-Mart’s restocking challenge coincides with slowing sales growth. Same-store sales in the U.S. for the 13 weeks ending April 26 will be little changed, Bill Simon, the company’s U.S. chief executive officer, said in a Feb. 21 earnings call. While sales are struggling at Wal-Mart, chief rival Target (NYSE: TGT) is showing remarkable growth. With a planned push into Canada, the company is hoping to take on Wal-Mart on foreign soil. Wal-Mart has had substantial success in the Great White North, but Target hopes to take away some of the gains that Wal-Mart has gotten by opening more than 100 stores throughout the remainder of 2013.
Wal-Mart’s labor woes are long running. Wal-Mart Stores Inc. will pay $4.8 million in back wages and damages to more than 4,500 employees nationwide for unpaid overtime, The Labor Department said Tuesday. The violations cover current and former managers at Wal-Mart vision centers and certain security personnel at Wal-Mart Discount Stores, Wal-Mart Supercenters, Neighborhood Markets and Sam’s Club warehouses. The Labor Department said the company improperly considered the workers to be exempt from overtime pay. Wal-Mart spokesman Greg Rossiter said the company took the allegations seriously when they were first raised in 2007 and immediately corrected the way it classified the employees.
