NOBULL: Walmart Strains to Keep Aisles Stocked Fresh – NY Times

Walmart Strains to Keep Aisles Stocked Fresh

Nadav Neuhaus for The New York Times

A Walmart in North Bergen, N.J. The retailer’s customers have complained about the quality and freshness in the produce aisle.


Published: April 3, 2013 79 Comments

Michelle Obama visited a Walmart in February to extol the fresh, healthy food in the company’s grocery aisles. But Walmart, Ms. Obama’s corporate partner in a campaign to make food healthier and more affordable, has been running into problems with food that is not so fresh.

Readers’ Comments

"I was wondering why Walmart had a problem with shelf life when I didn’t have that problem buying it at a local … supermarket. It seems that you get what you pay for when it comes to produce."

B.S., West Sacramento, CA

Walmart, the nation’s largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Walmart managers show the company grappling with low customer confidence in its produce and poor quality. “Lose Trust,” reads one note, “Don’t have items they are looking for — can’t find it.”

Walmart is addressing the grocery concerns with measures like a new inventory system and signs that will help employees figure out what is fresh and what is not, Jack L. Sinclair, Walmart United States executive vice president for food, said in an interview. Brooke Buchanan, a company spokeswoman, said Walmart felt its stores were fully staffed.

Before the recession, at the start of 2007, Walmart had an average of 338 employees per store at its United States stores and Sam’s Club locations. Now, it has 281 per store, having cut the number of United States employees while adding hundreds of stores.

“In its larger supercenter stores, Walmart can’t keep the shelves stocked, and that is driving customers away,” said Terrie Ellerbee, associate editor at the grocery industry publication The Shelby Report, in an e-mail.

She traced the problem to 2010, after Walmart reduced the range of merchandise it carried in an attempt to make stores less cluttered. Customers did not like the change, and Walmart added merchandise back, but with declining sales then, it did not add back employees, she said. “Without enough labor hours to get those items back, not to mention to do routine stocking, shelves were left bare,” Ms. Ellerbee said.

Walmart charged into the grocery market about two decades ago, realizing that frequent trips by grocery shoppers could help improve traffic. Grocery made up 55 percent of Walmart United States sales in 2012, which was flat from the previous year. The company’s grocery prices are usually about 15 percent below competitors’, according to Supermarket News.

Grocery has also been a centerpiece of its corporate responsibility strategy, as the company has trumpeted its support from Ms. Obama in selling healthy foods in underserved, low-income communities.

At the event with Ms. Obama in Springfield, Mo., the company said it had saved customers $2.3 billion on fresh fruits and vegetables in two years.

Ms. Obama’s office said that Walmart “has been a strong partner” on the healthy-food front. “There’s still more to be done, but we look forward to continuing working with Walmart and others,” said Sam Kass, executive director of Let’s Move!, Ms. Obama’s anti-obesity program.

Yet growth has been slowing, analysts say.

“They’re still growing share and aisles at a tremendous rate, but not at the rate they were, in part because many of the established operators that are left today are pretty strong,” said Mark Hamstra, retail and finance editor of Supermarket News.

Walmart does well in dry goods, but fresh food requires more manpower to stock and rotate goods, involves more waste and is a higher-cost operation, he said.

According to the notes from the Walmart meeting last month in Orlando obtained by The New York Times, while Walmart has 20 percent of the market share in dry grocery, it has 15 percent in fresh (areas like produce, meat, deli and bakery).

Safeway customers are 71 percent confident in its fresh produce, the notes said, while Walmart customers are 48 percent confident in Walmart’s produce. In the interview, Mr. Sinclair of Walmart said he did not know where that data came from, but that “we believe that we can improve the perception of quality of produce for Walmart customers.”

The notes highlighted some stocking problems: “1 hour out of Refrigeration = 1 day less product life,” they read, adding that Walmart will change shift responsibilities so fresh food is not stocked overnight and goes out at 10 a.m., not 7 a.m. Also, Walmart will add secret shoppers to check on produce quality weekly, and add “would I buy it?” guides for employees, the notes said.

“What we’re trying to do this year is really accelerate the produce side of our business with better quality,” Mr. Sinclair said.

The company just introduced an inventory management system for produce departments nationwide that will track how many days an item has been in transit, how much shelf life remains, and what orders the company should place to meet demand. With delicate items like raspberries, “you almost need to know by the hour how long the product has been through our system,” which was hard to track when 42 distribution centers buying from hundreds of different vendors were sending around products, he said.

Mr. Sinclair said the stores would also change from putting out produce in huge amounts to displaying small quantities and “showing customers that they’re bringing fresh produce out all the time.”

Asked if the lower staffing levels in the stores was affecting replenishment, Mr. Sinclair said that he would not comment on other parts of the store, “but in terms of the produce issue, our availability challenges are the same as everyone else’s challenges across the marketplace.”

Labor groups and some employees say the low staffing levels are hurting the in-store experience.

Tsehai Scott, a manager at a Los Angeles Walmart who is a member of the union-affiliated employee group OUR Walmart, said “sometimes there’s a 30- or 40-minute wait in the line” because there are not enough cashiers working. With as few as 11 people on the overnight shift stocking the 218,000-square-foot store, “stocking has fallen by the wayside in what we call the consumable areas,” meaning everyday products like food or toiletries.

“The department won’t get as clean as it should,” she said, “or we’ll see spoiled food in the food department, that if we had enough hands, we could get it back to the freezer or refrigerator in time.”

Ms. Scott says she has pushed for additional staff or for more hours for existing staff, “and the answer that I receive is they want to focus on productivity with the workers that we do have,” she said. Ms. Buchanan of Walmart said that on-shelf availability was at a record high, and metrics for cleanliness and other categories were on upward trends.

Still, customers have been complaining about stocking and may not wait around for Walmart. “People are going elsewhere,” said Ms. Ellerbee of The Shelby Report.

A version of this article appeared in print on April 4, 2013, on page A1 of the New York edition with the headline: Walmart Strains To Keep Aisles Stocked Fresh.