The New York Times this morning reports that last month, Walmart issued an "urgent agenda" memo to managers around the country, "pushing them to improve performance on 'Chilled and Fresh' items in its dairy, meat and produce departments, part of an effort by Walmart to stem long-sluggish sales. It also reflected customer complaints that Walmart has received in recent years as it has expanded offerings of organic foods and produce, often at cheaper prices than its competitors … the memo reminds managers that their No. 1 concern must be sales. For the last 18 months, Walmart’s sales have been sluggish in stores open at least a year. The memo also urges managers to reduce backup inventory to trim costs, and warns them not to exceed budgets for their stores."
However, the memo also "warns managers not to exceed the weekly hours assigned to their stores. It tells managers to examine whether they are assigning employees too many hours or overtime beyond what the company had budgeted."
According to the story, "The memo, marked 'highly sensitive,' tells Walmart marketing managers to make sure that the company’s 4,965 United States stores discount aging meat and baked goods to maximize the chance that those items will sell before their expiration dates. The memo - leaked for public use by a Walmart manager unhappy about understaffing - also tells stores to be sure to 'rotate' dairy products and eggs, which means removing expired items and adding new stock at the bottom and back of display cases.
"In discussing produce, the memo tells managers to 'validate that stores are fully executing on ‘Would I Buy It?’ ' — a plea to make sure that every store removes moldy or rotting fruits and vegetables."
However, the memo also "warns managers not to exceed the weekly hours assigned to their stores. It tells managers to examine whether they are assigning employees too many hours or overtime beyond what the company had budgeted."
According to the story, "The memo, marked 'highly sensitive,' tells Walmart marketing managers to make sure that the company’s 4,965 United States stores discount aging meat and baked goods to maximize the chance that those items will sell before their expiration dates. The memo - leaked for public use by a Walmart manager unhappy about understaffing - also tells stores to be sure to 'rotate' dairy products and eggs, which means removing expired items and adding new stock at the bottom and back of display cases.
"In discussing produce, the memo tells managers to 'validate that stores are fully executing on ‘Would I Buy It?’ ' — a plea to make sure that every store removes moldy or rotting fruits and vegetables."
- KC's View:
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When it comes to how to deal with fresh foods, the memo makes absolute sense - Walmart is simply encouraging its people to do what needs to be done in any competent food store.
But it gets dicey when Walmart also warns managers not to spend any more money on the labor that may be necessary to get the job done.
The Times notes that "one assistant store manager in the South, who insisted on anonymity for fear of retaliation, said the company was refusing to let him add more employee hours to complete needed daily tasks, like discounting older meat or eggs. As a result, he said his store had been forced to throw out far more milk, eggs and produce than in previous years."
And it also quotes the always reliable and perceptive Burt P. Flickinger III as saying, “Labor hours have been cut so thin, that they don’t have the people to do many activities. The fact that they don’t do some of these things every day, every shift, shows what a complete breakdown Walmart has in staffing and training.”
The thing is, there is no law that says a retailer cannot be both effective and efficient. But the Walmart case demonstrates that especially as it tries to improve its reputation and build sales in fresh foods, it needs to give far more attention to being effective than just lip service. In the end, that's what the memo is. Lip service. It remains to be seen whether Walmart will actually give its people the tools with which they can do the job.
