The Free Press, Mankato, MN

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State, national news

April 4, 2013

Wal-Mart strains to keep shelves stocked

Stores struggle to keep food fresh

NEW YORK —  

Michelle Obama visited a Wal-Mart in February to extol the fresh, healthy food in the company’s grocery aisles.

But Wal-Mart, Obama’s corporate partner in a campaign to make food healthier and more affordable, has been running into problems with food that is not so fresh.

Wal-Mart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Wal-Mart managers show the company grappling with low customer confidence in its produce and poor quality.

“Lose Trust,” reads one note, “Don’t have items they are looking for — can’t find it.”

Wal-Mart is addressing the grocery concerns with measures like a new inventory system and signs that will help employees figure out what is fresh and what is not, Jack Sinclair, Wal-Mart’s U.S. executive vice president for food, said in an interview. Brooke Buchanan, a company spokeswoman, said Wal-Mart felt its stores were fully staffed.

Before the recession, at the start of 2007, Wal-Mart had an average of 338 employees per store at its U.S. stores and Sam’s Club locations. Now, it has 281 per store, having cut the number of U.S. employees while adding hundreds of stores.

“In its larger supercenter stores, Wal-Mart can’t keep the shelves stocked, and that is driving customers away,” said Terrie Ellerbee, associate editor of the Shelby Report, a grocery industry publication, in an e-mail.

She traced the problem to 2010, after Wal-Mart reduced the range of merchandise it carried in an attempt to make stores less cluttered. Customers did not like the change, and Wal-Mart added merchandise back, but with declining sales then, it did not add back employees, she said.

“Without enough labor hours to get those items back, not to mention to do routine stocking, shelves were left bare,” Ellerbee said.

Wal-Mart charged into the grocery market about two decades ago, realizing that frequent trips by grocery shoppers could help improve traffic. Grocery made up 55 percent of Wal-Mart U.S. sales in 2012, which was flat from the previous year. The company’s grocery prices are usually about 15 percent below competitors’, according to Supermarket News.

Although Wal-Mart does well in dry goods, fresh food requires more manpower to stock and rotate goods, involves more waste and is a higher-cost operation, he said.

According to the notes from the Wal-Mart meeting last month in Orlando obtained by the New York Times, while Wal-Mart has 20 percent of the market share in dry grocery, it has 15 percent in fresh (areas like produce, meat, deli and bakery).

Safeway customers are 71 percent confident in its fresh produce, the notes said, while Wal-Mart customers are 48 percent confident in Wal-Mart’s produce.

In the interview, Sinclair of Wal-Mart said that he did not know where that data came from but that “we believe that we can improve the perception of quality of produce for Wal-Mart customers.”

 

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