Aug
31
2015

Wal-Mart increases wages, cuts hours.

Shocking! – And by ‘shocking’ I mean ‘not shocking at all.’ If you are familiar at all with how business works, then you know that retail companies typically operate on a limited profit margin (Wal-Mart averages¬†at about 3% a quarter). They do not have much of a margin. They certainly don’t have the margin that the Activist Left apparently thinks that retail stores do! ¬†So if wages go up, either expenses go down, or profits do – and you need a buffer for bad months and/or years, otherwise the company starts losing money and then things get messy.

Here’s Wal-Mart’s comment, by the way: “Wal-Mart spokesman Kory Lundberg told Bloomberg that the company is reducing hours, but the reductions only affect stores that have have been overstaffed.” Translation: Wal-Mart can no longer afford to be easygoing about job performance. Time to earn that nine bucks an hour…

Moe Lane

PS: I am indifferent about the fate of Wal-Mart, but I wish more people would sit down and actually think about the math involved in running a business.

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7 Comments

  • nicklevi86 says:

    “Over staffed?” I can barely find an associate or an open checkout as it is. Not that they pursue the “service” niche with any passion to begin with.

  • zamoose says:

    “If it wasn’t for bad service they wouldn’t have any service at all!”
    .
    I darken the neighborhood Wally World on average once yearly, as they’re the only place that reliably carries the kind of almond bark we need to make my wife’s good old Southern-style white trash.

  • JAB says:

    Some Wal-Marts are better than others. If it’s the biggest store in a small or medium sized town, the ones I know of aren’t bad. If it’s a downmarket option in a big city, I tend to stay far away.

    • Skip says:

      Amazingly enough, even in bigger areas they vary. When I lived in far North Dallas, I was about ten minutes away from two different Wally Worlds. The one to the west was kind of scary at times, not well kept up, and the fresh produce and meat looked pretty iffy. The one to the east, on the other hand? In Plano, it was practically upscale, the meat and produce all looked good, heck, it even had sushi. Prices were probably 10-15% more expensive at the upscale one across the board, even though it was maybe 5-6 miles as the crow flies away from the downscale one.
      .
      Interestingly though, the upscale one did not sell guns and ammo, but the grungy one did.

  • qixlqatl says:

    “…I wish more people would sit down and actually think about the math involved in running a business.”
    .
    But thinking is hard! Much easier to let the six o’clock news tell you what to think….

  • Socratease says:

    The math of running a business? Heck, I flummoxed the cash register girl in the cafeteria today by giving her $20.01 for a $9.31 bill.

  • BigFire says:

    Moe, math is patriciatical and racist, don’t you know?

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