WalMart (NYSE: WMT) keen to enhance market share – Significant investments plannedMd Noman Siddique (Author) Published Date : Apr 02, 2015 06:37 IST
Boston - WalMart Stores is shifting gears into the heavy investment mode over the next 18 to 24 months in its effort to improve the way inventory is handled and more locations offering store pick up for online orders.
The company based out of Bentonville, Arkansas is also working on making prices more competitive in private label products and perking up its grocery business, according to Wal Mart executives.
We have as a top priority to grow sales and market share, Greg Foran, head of Wal-Mart s US operations, said at the event. And that starts with improving the core and concurrently investing for the future.
The largest retailer in the world is in the middle of an expensive turnaround plan under its CEO Dough McMillon, who took over the reins over an year ago. As part of this effort, this month Wal Mart is raising wages aiming to retain workers in a situation where the labor market is becoming increasingly tight. About half a million Wal Mart employees can expect a better pay packet beginning April and the hourly rates are likely to grow to $9 now and about $%10 next year
Reaction from the investors to the proposed boost in spending was tepid. When it announced the pay hike in February, they had mentioned that the move would impact earnings and the shares fell 4.2 % on the day of the announcement registering the biggest single day fall in four months. On Wednesday, the stock dropped further registering a 1.9% decline at $80.75 in New York.
Notwithstanding the expense, the efforts of Wal-Mart to improve its workforce will pay off, probably in the long run, according to Oliver Chen, an analyst at the New York based Cowen &Company.
This year s wage/training investments should put stores on better footing, he said in a report
Greg Foran, the CEO and President for Wal-Mart in U.S. averaged about 15 stores in a month ever since he was promoted in August last. These unannounced visits affirmed what Wal-Mart executives and Foran himself suspected. The nearly 4,500 Wal-Mart stores deserved to be cleaner, more consistently stocked, better run, and staffed with employees who are more engaged.
Thed116 visits by Foran in eight months yielded a host of areas needing improvement. Inventory availability, customer experience, blending physical and digital resources, store design and layout, adding merchandise that customers were looking for, pricing and enhancing the relationship between the company s home office and stores etc. Foran also indicated the desire to improve performance of Wal-Mart s gas, health care and financial services offerings.
WalMart (NYSE: WMT) keen to enhance market share – Significant investments planned