Empty shelves at Walmart are getting a lot of attention these days, but the situation isn’t new and can’t be blamed entirely on store staffing levels.
Reports in Bloomberg and The New York Times have both detailed Walmart’s shortcoming when it comes to keeping products on shelves. And both reached the same conclusion that the issue is related to a reduction in staffing levels. It is a convenient and easily understood explanation because if there are fewer associates working there is less time available to perform the essential functions of running a retail business, namely keeping shelves stocked and accepting payment from customers.
The fact that Walmart is struggling to keep its shelves stocked is not a new development. Retailing Today documented the company’s difficulties with an in-stock study in 2003. Back then, the company regularly vowed to Wall Street that it would grow inventories at half the rate of sales because it was focused on improving its return on assets.
We suspected pursuit of that strategy might put a strain on the company’s supply chain and leave store backrooms with little safety stock to accommodate demand spikes associated with promotional efforts. Then, as now, Walmart’s supply chain was touted as state-of-the-art and a source of great competitive advantage.
The methodology involved picking 12 items across a range of categories that were featured in what was then a monthly circular that appeared in May 2003. Editors conducted simultaneous store visits the day after the ad first appeared at 12 locations in New York, New Jersey, Atlanta, Tampa, Dallas, Chicago and San Diego.
Walmart’s performance was abysmal with the items featured in the ad in stock only 77% of the time. In hindsight, the methodology of the study was skewed to allow Walmart to fare better. The items included were those featured in an ad so stores presumably would have received adequate inventory levels days if not weeks in advance of the ad breaking to accommodate increased demand. In addition, the survey was conducted on a Thursday after the ad broke on Wednesday, again giving Walmart an advantage because the stores had yet to experience peak weekend traffic.
And still the company scored 77%.
“We are not pleased with these results. Our goal is to have every featured item in stock for the entire length of the circular, an