2016 is the year of 10,000 Walmart employee layoffs due to the company closing 154 stores in the U.S.
Walmart’s ongoing business strategy, based on Ray Kroc’s model of creating a simple concept that is easily duplicated, is rapidly backsliding. Walmart has utilized this duplication strategy and added an additional scheme by bringing its stores into low-income neighborhoods. Opening retail stores that supply necessities, particularly consumables, in neighborhoods where people have very limited resources forces community dependency on Walmart. Lower-income neighborhoods, where citizens have transportation limitations, combined with lower retail costs has produced quantified profits for Walmart.
Walmart CEO Doug McMillon stated that they are closing 154 stores in the US. and laying off 10,000 employees to ‘.. keep the company strong and positioned for the future. It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.’
How can Walmart close 154 stores, while ‘growing’ 154 stores plus 146 stores equalling 300 ‘around the world?’ Does this mean that Walmart is opening stores, in the U.S., with a different marketing plan and a fresh crop of employees? Or does ‘around the world’ indicate a downsizing in the U.S. and expanding in other countries where labor is cheaper? Once these promised 300 stores open, the specific store locations, employees hired, and operations should answer these questions and likely raise others.
2016 begins with the announcement that Walmart is downsizing in the U.S., as 2015 statistics reveal rapid market growth for Amazon. Walmart is downsizing to ‘stay strong for the future,’ while Amazon is growing stronger and developing a more popular marketing concept. The concept of the one-stop-shop “super store” that has just about everything, at a reasonable price, is clearly being trumped by the concept of ordering literally anything from anywhere on the globe online. If Amazon fulfills its objective, online orders will soon be delivered by drone. CSNBC Ari Levy states in “It’s no secret that Amazon has changed the retailing game by selling just about everything imaginable, often at the lowest price, and shipping products with such speed and efficiency that many consumers have simply stopped going to stores.” This statement demonstrates that there is an obvious shift in shopping preference toward Amazon. (“Commerce in Chaos: Can Anyone Take on Amazon,” Ari Levy.) As baby boomers age, the demand for more products and greater convenience grows. The baby boomer generation is demanding more independence. Ordering online, especially undergarment products, is growing with the influx of aging baby boomers.
Investing Channel, Zero Hedge’s article “Is WalMart In Terminal Decline? This Chart Is One More Reason To Think So” illustrates how Amazon’s rapid growth has been surpassing and is now eclipsing Walmart. The graph shows how Amazon’s annual growth was less than 5%, 2003-2006, while Walmart far surpassed this growth by approximately 17%. A drastic shift occurs in 2010 when Wal Mart’s growth shrinks to nearly nothing, while Amazon grows by about 11%. By 2011,Walmartrebounds, only slightly, while Amazon leaps ahead. 2011-2015 Walmart‘s growth remains low and fluctuates, while Amazon continues to rise. By 2014, Walmart‘s growth is less than 10%, while Amazon shoots to 22%. The most drastic change and contrast between Walmart and Amazon occurs in 2015, with Walmart growing by less than 10%, as Amazon leaps up to a growth of 42%. Not only does Amazon beat itself by climbing from 22% to 42%, but also grows four times the percentage ofWalmart‘s growth in 2015! This rapid and drastic shift clearly challenges Walmart‘s future security and marketing model.
The pending closure of these 154 Walmart stores is an incident, among many, of how Walmart has impacted American economy and dictated our way of life. According to PressTV, “A study in 2013 by Congress found employees at a single Wisconsin Walmart receive about $1 million per year in public assistance.” This Wisconsin community and many other U.S. communities, years ago, had a Walmart store imposed upon them, forcing out local small businesses. We, as a nation, have been paying for the public assistance benefits that working Walmart employees require due to low pay creating an unmet financial need. Now our US economy and citizens will pay for WalMart‘s impact as 10,000 citizens face unemployment. Meanwhile, the 154 stores are closing in middle to low-income neighborhoods. The same stores that the WalmartCorporation forced these communities to solely depend on, are now abandoning these same communities.
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