H/t reader squodgy:
“Just so we know….”
* * *
As Wal-Mart ramps up its war against Amazon.com, it seems the retailer’s suppliers are increasingly being squeezed. After telling trucking companies that the retailer will no longer do business with them if they continue moving goods for Amazon, Wal Mart is now threatening to punish suppliers for delivering goods a day early. Here’s Bloomberg:
Long known for squeezing its vast network of suppliers, Wal-Mart Stores Inc. is about to step up the pressure.
The focus this time is delivery scheduling, and the company’s not messing around. Two days late? That’ll earn you a fine. One day early? That’s a fine, too. Right on-time but goods aren’t packed properly? You guessed it — fined.
The program, labeled “On-Time, In-Full,’’ aims to add $1 billion to revenue by improving product availability at stores, according to slides from a presentation obtained by Bloomberg, and it underscores the urgency Wal-Mart feels as it raises wages, cuts prices and confronts a powerhouse rival in Amazon.com Inc. that’s poised to grow with its planned purchase of Whole Foods Markets Inc.
In a note this morning from Deutsche Bank’s freight and logistics analyst Amit Mehrotra, he notes that the “WMT vs. AMZN battle is heating up” and points to a report by DV Velocity, according to which a well respected transportation industry consultant told attendees of a logistics conference that Walmart (WMT) is telling trucking companies that it will no longer do business with them if they continue moving goods for Amazon (AMZN).
This follows similar reports citing WMT’s “request” for its tech partners to stop using Amazon Web Services.
The news, while suggestive perhaps of Walmart’s growing desperation in its war with the retail juggernaut that is Amazon, has dramatic implications not only for the future of retail (and associated prices) but for one of the most important US industries: trucking, and the number of people it employes.
A lot of people were probably thrilled today about Amazon’s latest announcement. The online retail giant has revealed that they are going to reduce the cost of Prime membership, which provides free shipping for more orders and unlimited streaming for many shows and movies. But it’s not just for anyone. The reduced rate will be reserved for low income households.
An abandoned Walmart in Brownsville, Texas will soon be home to 100’s of illegal immigrant “minors”, many of them late in their teen years, thanks to your federal tax dollars. According to a report from a local ABC affiliate in Brownsville, the facility is currently being converted into a shelter by a nonprofit organization called Southwest Key, which receives the majority of its funding from federal tax dollars via the Office of Refugees Resettlement.
A Southwest Key spokeswoman confirmed the facility is set to open on March. They said it’ll be to welcome unaccompanied minors who crossed into the U.S. illegally.
It will be the 4th facility in Brownsville to shelter children, under the age of 17, who have crossed into the U.S. without an adult.
Setting the mood ahead of tomorrow’s “critical” for the Fed’s September rate hike decision payrolls report, moments ago, WSJ reported that Wal-Mart Stores plans to cut 7,000 back office positions around the country, a restructuring move that in addition to seeking to improve its efficiency, will drastically alter the layout of its workforce, which as recently as a year ago was delighted by WMT’s minimum wage price hikes.
WSJ reports that the country’s largest private employer is eliminating about 7,000 U.S. store accounting and invoicing positions over the next several months, jobs mostly held by long-term employees, often some of the highest paid hourly workers in stores. The retailer wants those employees working with shoppers, not in backrooms, say company executives. Centralizing or automating much of those tasks is more efficient, they say.
Walmart reported relatively decent Q1 results, however one item that was apparent is that costs are still a factor in the business, as operating income was lower y/y even on increased revenues.
We’ve discussed many times the fact that Walmart has been overly eager to boost everyone’s wage in order to appease the living wage crowd, and as a result the company has had to move forward with massive layoffs and store closings to try and mitigate the impact on profits. Earlier this month we also noted that Walmart is testing out drones that when operational, will be able to carry out what once were human tasks in its large distribution centers. This effort will further position the company to be able to shed more labor and benefit expense in the future. That said, Walmart isn’t waiting for the drone initiative to come online.
Wal-Mart Stores Inc. is working with a robotics company to develop a shopping cart that helps customers find items on their lists and saves them from pushing a heavy cart through a sprawling store and parking lot, according to a person familiar with the matter.
Such carts are an emerging opportunity for robotics companies as brick-and-mortar stores look for innovative ways to match the convenience of Amazon.com Inc. and other online retailers, said Wendy Roberts, founder and chief executive officer of Five Elements Robotics.
We may not have the exact numbers yet, but in a filing with the SEC on Tuesday, China’s online retail behemoth Alibaba Group announced that it had “become the largest retail economy in the world” at the end of its fiscal year on March 31, “as measured by gross merchandise volume (GMV) on its China retail marketplaces.” As IBT notes, the company has yet to declare its financial results for its last quarter and the complete fiscal year, but the announcement makes it clear that BABA surpassed the $482.1 billion in 2015 revenues reported by Wal-Mart Stores Inc. for its fiscal year ended Jan. 31. To wit:
Last week, WalMart doubled down on the wage hike debacle when the world’s largest retailer decided to give everyone a raise in February.
The all-in cost will be around $2.7 billion. While some were surprised at the move, it was easy to see coming. Indeed, we’ve long said that the company’s decision to hike wages for its lowest-paid employees would eventually necessitate similar raises for workers higher up the corporate ladder.
The last 12 months have not been kind to WalMart.
When the world’s largest retailer bowed to pressure to raise wages for its lowest-paid employees, the living wage crowd cheered. In short order, it became apparent that the reverberations from the $1.5 billion endeavor would spell trouble for the company.
Peak globalization?Burmese men, women and children are being sold to factories in Thailand – “no names are used, just numbers” – and forced to peel shrimp that ends up in global supply chains.As a recent AP investigation uncovered, U.S. customs records show the shrimp made its way into the supply chains of major U.S. food stores and retailers such as Wal-Mart, Kroger, Whole Foods, Dollar General and Petco, along with restaurants such as Red Lobster and Olive Garden.
Shrimp is the most-loved seafood in the U.S., with Americans downing 1.3 billion pounds every year, or about 4 pounds per person. Once a luxury reserved for special occasions, it became cheap enough for stir-fries and scampis when Asian farmers started growing it in ponds three decades ago. Thailand quickly dominated the market and now sends nearly half of its supply to the U.S.
And the way to keep those prices low enough for a stagnant-wage-earning America… “slavery”