Walmart Pares Down Inventory to Boost Sales
Walmart is shaving down redundant in-store products (think fewer size options for the same item), as it moves to boost online sales and raise wages.
The average supercenter already boasts 2,500 fewer items than a year ago; that's worrying vendors who fear they could lose tens of millions of dollars in sales. But a shift is necessary, especially after the retail giant's stock fell 10% in a single day after predicting profits will drop as much as 12% in 2016.
Walmart is putting $2.7B into increasing wages and another $2B into positioning itself as an online powerhouse to compete against the likes of Amazon. It will also try again to target middle and upper middle income households.
Vendors are afraid that they might have to carry the costs of Walmart's problem-solving. For instance, this summer vendors had to pay a fee and accept longer payment windows. It's too soon to tell how effective the strategy is, but sales in stores open at least a year rose 1.5% last quarter. [WSJ]
