Wal-Mart (WMT) Shelves Bare All; Inventory Issues Hurting Retail Giant
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Wal-Mart (NYSE: WMT) is giving new meaning to "just-in-time" inventory controls.
According to the NY Post, and millions of shoppers nationwide, shelves at Wal-Mart have become more vacant lately, as the retail giant aims to squeeze more profit per location. Sales at Wal-Mart have been anemic over the last several quarters as rivals like Target (NYSE: TGT) and Dollar Tree (Nasdaq: DLTR) continue ramping-up the competition.
At a meeting this month, Wal-Mart told suppliers approximately 7 percent of goods were out of stock at the average U.S. Wal-Mart store. Normal inventory gluts nationwide have averaged 5 percent or less over the lifespan of Wal-Mart.
With school shopping season underway, bare shelves are also costing Wal-Mart sales.
In lieu of continuing domestic sales declines, Wal-Mart called a "Replenishment Summit" to prep for the back-to-school shopping season. Wal-Mart wants suppliers to become more familiar with its "Retail Link" software, which gives up-to-the-minute data of what is on shelves at every store. Wal-Mart hopes this will enable suppliers to make small shipments more frequently, keeping inventory levels lower.
Currently, Wal-Mart maintains guidelines that stores cannot order more than one-and-a-half times what can fit on a shelf, save for exceptions related to fast-moving items like toiletries and consumables.
Investors hope Wal-Mart can convince suppliers to get on board. As the old saying goes, you can't sell it if you don't have it.
Shares are about 1 percent lower early Thursday.
According to the NY Post, and millions of shoppers nationwide, shelves at Wal-Mart have become more vacant lately, as the retail giant aims to squeeze more profit per location. Sales at Wal-Mart have been anemic over the last several quarters as rivals like Target (NYSE: TGT) and Dollar Tree (Nasdaq: DLTR) continue ramping-up the competition.
At a meeting this month, Wal-Mart told suppliers approximately 7 percent of goods were out of stock at the average U.S. Wal-Mart store. Normal inventory gluts nationwide have averaged 5 percent or less over the lifespan of Wal-Mart.
With school shopping season underway, bare shelves are also costing Wal-Mart sales.
In lieu of continuing domestic sales declines, Wal-Mart called a "Replenishment Summit" to prep for the back-to-school shopping season. Wal-Mart wants suppliers to become more familiar with its "Retail Link" software, which gives up-to-the-minute data of what is on shelves at every store. Wal-Mart hopes this will enable suppliers to make small shipments more frequently, keeping inventory levels lower.
Currently, Wal-Mart maintains guidelines that stores cannot order more than one-and-a-half times what can fit on a shelf, save for exceptions related to fast-moving items like toiletries and consumables.
Investors hope Wal-Mart can convince suppliers to get on board. As the old saying goes, you can't sell it if you don't have it.
Shares are about 1 percent lower early Thursday.
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