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Walmart protest in Chicago IL
Walmart's cost-cutting policies and uncertainty around its aggressive battle against its own workers have cost the company in a report from equities researchers at Wolfe Research:
The firm lowered Walmart from a “market perform” rating to an “underperform” rating, pointing to three main causes: understaffing, an erosion of its price advantage against competitors, and costs associated with intensifying pressure from worker organizing.

While cutting fixed costs, like the number of employees, as an attempt to get more from less can work for some businesses, the researchers note that this isn’t having a good impact for the company. “Walmart U.S.’s relentless focus on costs does seem to have taken some toll on in-store conditions and stock levels,” the note says in regards to understaffing. “[O]ur store visits over the last six months show a repeating pattern of stocking issues in many departments in the store.” When products aren’t on the shelves, that means Walmart can’t sell them, depressing overall sales. And if the shelves are empty and the lines are long, there may not be a reason for consumers to frequent the stores.

Walmart has also downgraded its own expectations, saying cuts to food stamps would hurt profits, news that highlighted the company's reliance on government assistance, with many Walmart workers needing Medicaid or food stamps to supplement poverty wages.

Walmart has added hundreds of stores in recent years while cutting its workforce, leading to pervasive complaints about understocked shelves and long lines, as reflected in the Wolfe downgrade. The company has also engaged in a bruising battle with its own workers, leading to charges of labor law violations by the National Labor Relations Board, as well as widespread attention to its reliance on government assistance to make up for the low wages it pays. Meanwhile, analysts say Walmart could pay an average wage as high as $14.89 without raising prices.

Originally posted to Daily Kos Labor on Mon Feb 10, 2014 at 10:52 AM PST.

Also republished by In Support of Labor and Unions and Daily Kos.

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