GatewayRedbirds.com

This guy says they are doing it because Wal-Mart's business model is broken. Just follow for a minute - Wal-Mart pays a lot lower than competitors like Costco....however, their overall labor costs as a percent of sales are very similar to Costco's. Why? Because Wal-Mart has a ton more turnover than Costco, so Wal-Mart spends a ton more on training employees than Costco. Then on top of that, Costco gets a ton of side benefits from paying employees better. Less turnover, more experienced employees, happier employees, and no P.R. black eyes like Wal-Mart has gotten (like when they were doing Thanksgiving food drives for their own employees). When you add all this up, Costco ends up with happier customers, too, which is the most important thing. Same-store sales at Wal-Mart have declined.

It also points out how Wal-Mart employees got $2.6 billion in welfare last year.

http://www.bloombergview.com/articles/2 ... ets-scarce

In the business life cycle, Walmart is pretty much past the growth stage (in US). Life is a lot easier in growth mode -with finding employees, financing, hype over new locales, stock price -it was like a boomtown. Now that the stores have years at locales - there is more competition, and less communities willing to subsidize Walmart development (TIFs etc).

Since it's not as wide open: Wal-Mart has to live in a more real and sustainable business world now, and part of that is attracting employees and reducing turnover.

2.6 billion in welfare is hilariously sad.

The prices at WalMart are good. I just dislike hearing parents threaten their children, and florescent lights that need to be replaced, so I don't go there. But as a good Portlander, after making some kind of choice like this, you always claim the best highground the choice offers, be it cultural, moral, green etc. So I don't go there because of their treatment of employees.

pioneer98 wrote:This guy says they are doing it because Wal-Mart's business model is broken. Just follow for a minute - Wal-Mart pays a lot lower than competitors like Costco....however, their overall labor costs as a percent of sales are very similar to Costco's. Why? Because Wal-Mart has a ton more turnover than Costco, so Wal-Mart spends a ton more on training employees than Costco. Then on top of that, Costco gets a ton of side benefits from paying employees better. Less turnover, more experienced employees, happier employees, and no P.R. black eyes like Wal-Mart has gotten (like when they were doing Thanksgiving food drives for their own employees). When you add all this up, Costco ends up with happier customers, too, which is the most important thing. Same-store sales at Wal-Mart have declined.

It also points out how Wal-Mart employees got $2.6 billion in welfare last year.

http://www.bloombergview.com/articles/2 ... ets-scarce

.

I can't figure out why business people haven't figured out yet that happy employees mean better employees which means better business and ultimately more money. I guess I learned it from my Grandpa and Dad. You pay your employees well, you treat them well and they will deliver for you.

I remarked the other day while at Wal Mart with Michelle have you seen a single person in this story smiling? Workers or shoppers. The answer was no one. Wal Mart has become a necessary evil for a lot of people. That's not a sustainable business model imo. When people only come to you because they have to you're ripe for something bad to happen.

pioneer98 wrote:This guy says they are doing it because Wal-Mart's business model is broken. Just follow for a minute - Wal-Mart pays a lot lower than competitors like Costco....however, their overall labor costs as a percent of sales are very similar to Costco's. Why? Because Wal-Mart has a ton more turnover than Costco, so Wal-Mart spends a ton more on training employees than Costco. Then on top of that, Costco gets a ton of side benefits from paying employees better. Less turnover, more experienced employees, happier employees, and no P.R. black eyes like Wal-Mart has gotten (like when they were doing Thanksgiving food drives for their own employees). When you add all this up, Costco ends up with happier customers, too, which is the most important thing. Same-store sales at Wal-Mart have declined.

It also points out how Wal-Mart employees got $2.6 billion in welfare last year.

http://www.bloombergview.com/articles/2 ... ets-scarce

Another thing it seems Wal-Mart misses is that if they pay their employees more, their sales will rise since Wal-Mart is probably the place their employees shop more than any other place. Wal-Mart is going to get back X% of any wage increase. Same reasoning Ford used to pay his auto workers more. He knew they'd be his customers.

If the bean counters at Wal-Mart were smart, they'd know what X is in that equation and put it into their spreadsheets. Why not? Anyone know if they do?

still hoping trickle down works?

Jocephus wrote:still hoping trickle down works?

Jocephus wrote:still hoping trickle down works?

Who? me? Not at all. Just pointing out that there are benefits to the corporation if they treat their employees better that I don't think the hyper-capitalists appreciate.

Joe Shlabotnik wrote:

Jocephus wrote:still hoping trickle down works?

Who? me? Not at all. Just pointing out that there are benefits to the corporation if they treat their employees better that I don't think the hyper-capitalists appreciate.

didn't mean to imply you. responding/guessing to your question