Following Massive Protests, Walmart’s Profits Are In the Toilet, New Orders On Hold

large

In breaking news this week, Wal-Mart Stores Inc. is cutting orders it has placed with suppliers this quarter and next, as it continues to face some of the biggest protests in years. Strangely, the mainstream media is virtually radio-silent on the issue of Walmart’s falling profits.

But Walmart says that their “rolling back” orders, rather than prices, is in order to address their rising inventory, amidst concerns about the company’s last month’s earnings report.

The company’s Bentonville, Arkansas, headquarters tried to explain their actions in an e-mail to a supplier last week. The suppler said that others got the same message as well, which read, “We are looking at reducing inventory for Q3 and Q4.”

Merchandise has been piling up on Walmart shelves as consumers continue to spend less and less. Is this the result of the massive boycotts and protests against the giant? It probably has more to do with the fact that more and more are having to make due with less and less. Walmart may not be experiencing a sharp decline in customers as much as they are experiencing those customers’ scaling back their purchases.

But the company says that it has forfeited some sales because it claims that it doesn’t have enough workers in stores. Could this be related to the massive walkout-strikes and protests the corporation has been facing Thus, according to Walmart, they cannot keep shelves adequately stocked. This hardly seems to be the case, however, appearing to be more damage-control “PR” than anything else.

Still David Tovar, a spokesperson for Walmart said “We are managing our inventory appropriately. We feel good about our inventory position.”

In spite of Tovar’s attempts to explain, Walmart fell 1.5 percent to $74.65 at the close in New York last week. U.S. chains were already bracing for a tougher than usual holiday season. While sales are projected to rise 2.4 percent, this is by far the smallest gain in years, when the recession of 2009 was in full swing.

The pullbacks for this quarter and next imply Walmart is expecting softer demand,

Robin Sherk, a New York-based analyst at the consulting firm Kantar Retail, said that Walmart’s rollbacks in orders are clearly an indication that they realize there is less demand for everything they are selling.

“If you’re worried about your top line, you protect your bottom line even more. You at least want to protect your money,” Sherk explained.

Protesters demonstrate outside a Walmart store in Chicago on Black Friday

Early last month, Walmart found itself facing the largest workers’ protests in years. Zach Schonfeld reports for the Atlantic Wire that:

The push for Walmart to pay its workers a living wage of $25,000 goes national on Thursday as employees and activists plan protests in 15 cities—and continue waiting for the retailer to respond to demands. If all goes according to a plan, it will be the biggest Walmart mobilization since Black Friday, when thousands rallied to support striking workers.

“We’re calling on Walmart to allow us better wages, affordable wages, sufficient healthcare, and to stop silencing workers who are speaking out such as myself,” Carlton Smith, who worked for Walmart for 17 years before being fired in May, said in an interview with The Atlantic Wire. “We shouldn’t be fired for standing up and speaking out.”

The protest will also be the second nationwide wage-related labor walkout in eight days, following the fast food strikes one week ago. In both instances, laborers point to the immense gap between corporate profits and staff earnings. But Walmart organizers say the company has gone one further by silencing its workers…

Perhaps this is the perfect timing for activists for workers rights, in the Occupy Movement, Unions and other affiliations to really focus in on targeting the corporation. Just a thought…

Post a Comment

You must be logged in to post a comment.