Executives of Wal-Mart Stores Inc., speaking at a company meeting this month, said its store shelves need to be better stocked with merchandise and that resolving the matter could be a $3 billion opportunity.
Improving “in-stocks” – a measure of how much merchandise is available for shoppers to buy – is a top focus for Wal-Mart, executives said at its Year Beginning Meeting, according to notes taken by an attendee that were reviewed by Bloomberg.
The company also plans to add labor hours as part of an effort to bolster “in-store execution,” executives said at the summit in Orlando, Fla., which was attended by CEO Doug McMillon and U.S. CEO Bill Simon.
Wal-Mart, the world’s largest retailer, has struggled to keep shelves stocked over the past year at U.S. stores, citing workers and customers. The lack of merchandise has frustrated some shoppers, prompting them to switch to the chain’s competitors.
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Increasing labor hours could make it easier for staff to get inventory from the stockroom and replenish the products on the store floor.
The focus of the meeting was “serving customers and reinforcing our commitment to serve them,” said David Tovar, a spokesman for the Bentonville, Ark.-based corporation. He didn’t elaborate on specific remarks from the event, which took place two weeks ago.
“More than 7,000 associates attended the meeting, and there was a lot of positive energy,” Tovar said in an email. “We used the meeting as an opportunity to listen to our store managers and give them the tools they need to succeed so they can do what they do best: Take care of customers.”
Even as it tries to better stock shelves, the company is working to curb inventory growth in the U.S., in an effort to cut costs and avoid being stuck with slower-moving merchandise. Wal-Mart will try to limit its inventory increases to half the rate of sales growth this year, Chief Merchandising Officer Duncan Mac Naughton said at the meeting.
In 10 of the past 12 quarters, growth of Wal-Mart’s U.S. inventory has exceeded that of sales.
The company forecast annual profit last month that fell short of analysts’ estimates, hurt by a still-sluggish U.S. economy and government benefit cuts.
McMillon, who took the CEO job in February, is attempting to boost growth with smaller-format stores. The company plans to open 270 to 300 Neighborhood Market and Walmart Express shops this year, almost doubling the number.
Wal-Mart’s U.S. division had $279.4 billion in sales in the fiscal year ended Jan. 31.