Empty Shelves Explained: Walmart’s Expansion Greatly Outpaced Its Hiring

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Last year, Walmart finally acknowledged what dozens of Walmart workers had already told us — that maybe the retailer had a slight problem with keeping shelves stocked at some stores. But a new look at store growth and hiring data over the last decade shows that this is not merely a matter of not having a few extra people to work the overnight shift.

According to a Reuters analysis of Walmart data, the retailer has spent the last decade growing its number of stores — resulting in increased sales — but has barely increased its total workforce to deal with that growth.

The approximately 1,500 new stores opened during this time equate to a 45% bump in Walmart’s overall retail footprint. Yet the company’s U.S. workforce only grew by around 8%. Reuters calculates that the amount of retail space per employee thus increased by 34%. However, it’s difficult to get an exact figure on Walmart workers since the company only provides approximate headcount info to the public.

By the company’s own metrics, a vast majority of its stores (83%) were failing at being able to provide quality service to customers by Feb. 2015.

Speaking to Reuters, Walmart’s head of U.S. operations Greg Foran admits that the company could probably have hired more people, and that the retailer has been overly concerned about quick-fix placating of shareholders.

“The reality is over the last probably four years it hasn’t been enough,” he explains. “The customer lost because the price gap narrowed…And the shareholder won short-term.”

A rep for Walmart downplays the disparity between rapid store growth and relatively flat headcount, explaining that advances in automation and technology — self-checkout, shelf-ready packaging — are the reason the retailer hasn’t had to hire so many new people.

And yet, the company has been on a bit of a hiring spree, hiring 8,000 new department managers this year. While that might seem like a lot of people, it’s fewer than two per store.

Walmart, which has been accused of slashing hours in recent years, claims to have begun adding more labor hours. Foran says it’s a matter of getting “the right labor in the right area at the right time doing the right jobs.”

The retailer says that these tweaks are having a positive effect, with around 70% of stores now receiving a passing grade on internal metrics.

Of course, shoppers only care what internal survey scores say if those improvements reflect the reality of their Walmart experience. This holiday season will be the first since the retailer admitted that it might have a headcount problem; we’ll know shortly if the retailer is really ready to keep shelves stocked.

by Chris Morran via Consumerist