Walmart inc Company Scoops

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Issues facing Wal-Mart – and their CEO's interview on CBS with Katie

Posted by vega Thu, 14 Sep 2006 02:09:48 GMT

After my last night’s article on the recent trend in retail shopping (Which one is better -Target or Wal-Mart?), I was anxious to see the Walt-Mart CEO’s interview on CBS. Well, there wasn’t anything earth shattering. Even though I don’t shop much at Wal-Mart anymore, I feel sorry for them – It is sad to see the politicians thumping on Wal-Mart so that they can get elected. This is a capitalistic country; the economy will take care of itself by punishing bad businesses and promoting good businesses. If Wal-Mart is wrongdoing with poor salary and healthcare benefits to their employees, then their customer service quality will fall and eventually their business will run its course like K-Mart. Have you visited K-Mart during and prior to their bankruptcy? I am not saying Wal-Mart will go bankrupt; their management is too smart for that.

From this article perspective, I care how Walt-Mart treats the customers more than their employees. In pure business sense, both customers and employees are magically intertwined. Without customers, there are no employees – basic capitalistic rule. We don’t need politicians to tell whether a business is doing the right thing or not. Following are the common social issues that surmount Wal-Mart.

1. Poor Salary

2. Lack of health benefits – Huge number of their employee’s children are without healthcare. Some say about 40-50%, which is huge and has a big impact on our federal dollars – those children take a toll on Medicare/Medicaid.

Besides the above socio-economic issues, each week about 150 million consumers shop at Wal-Mart. Any way you look at it that’s a huge number, which shows how important Wal-Mart is to our society. I don’t ever want this company to drop-dead like K-Mart and Enron; there will be huge economic repercussions if that happens.

Let’s look at the business issues that are facing Wal-Mart, and why folks like me (and my friends) don’t shop at Wal-Mart anymore.

1. Employees Morale: Employees are not motivated and they don’t care about customers. Can this be due to poor wages and health benefits? I will let Wal-Mart management to answer that question. Wal-Mart can look at the recent lessons from Home-Depot. One could argue that the needs of customers are different at these two stores. Consumers need more handholding at Home Depot than at Wal-Mart.

2. Product quality – For me this is the biggie. I don’t care how clean the store is; my main interest is the product quality. For example, have you ever been to a farmers market? They stink, but their groceries and produce qualities are way better than Wal-Mart – I am a regular at farmers market. But in Wal-Mart, the quality of the produce has significantly gone down recently; don’t even ask me about their meat department. Remember I used shop at Wal-Mart regularly. However, I don’t mind shopping for non-produce items such as sugar, salt etc. This is the main reason I have become a Target and Costco’s customer even though these stores are marginally expensive than Wal-Mart.

3. Return policy: Costco is the undisputed king of customer return policy. For that reason alone, I shop mindlessly at Costco knowing I’m protected. But the problem is I am lazy when it comes to returning stuff, and always end up wasting my money. Wal-Mart and Target have pretty much the same return policy, but the key difference is the employee working at the returns desk. At Wal-Mart, their employees give a dirty look when you return something. I guess this is a direct unexpected consequence of lower wages and benefits.

Before I conclude this article, I have to say one thing that I really like about Wal-Mart. I am impressed and appreciate the fact that Wal-Mart employs older people (some are really old) to greet customers. I happen to chat with such an old-gentleman and he explained how grateful he was to have that job – I know he really meant it from his voice and gestures.

Bottom-line, Wal-Mart is entering troubled waters and I hope they recognize it and do the necessary. I am glad to see the fierce competition from Target and Costco. For now Wal-Mart is my last stop for shopping. Lets wait and see what the future holds.