Wal-Mart Reducing Supply Orders and Hiring?

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Sept. 26 (Bloomberg) -- Strategic Resource Group's Burt Flickinger, Telsey Advisory Group's Joe Feldman and Bloomberg's Julie Hyman discuss Wal-Mart's outlook with Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Following the story very closely.

We know they are reducing their inventory.

It comes at a time when they just announce ever going to be hiring more people.

Let's be clear.

First of all, the company has been saying for several quarters at their sales were suffering and their inventories were building up as a result.

They are indeed cutting some orders to some suppliers.

The company says we are pulling back in some areas and increasing in other areas.

In the second quarter, it said specifically that it was gaining share in areas like food, health and wellness.

It seems like the staples are holding him relatively well.

It might be in the discretionary items where it is cutting back.

Its biggest supplier of apparel said they are not seeing any cancellation of orders, so it is a little bit confusing.

It is not across the board and it is not clear exactly where the orders are being cut.

Do you think walmart has more troubles ahead, this is just the tip of the iceberg?

The tip of the iceberg, the inventory management system is badly broken.

Not enough people in the store stocking the shelves.

Insufficient inventory, they have been cutting working capital, raising the dividend for the family and the shareholders, buy back more stock, get the stock price up.

We have covered walmart stores across canada and the u.s. and internationally, and the common denominator is they don't have customer accounts in their stores.

Do you think they alienated customers by not having enough supplies on the shelves?

You could take everybody in the bloomberg studio and they would be able to sleep in the empty shelves and not touch a single product.

If they're going to slash their contracts with suppliers, aren't they running a risk?

The problem is not that the inventory isn't in the store, the problem is there hasn't been anyone to put it out on the shelves.

But they will have even less inventory.

They said in some stores they are putting christmas items out because there is nowhere to put it in the back them up because there's stuff in the back piling up because there is nobody to put it on the shelves.

Once the consumer starts to shift away and hit a target or another store, it is hard to get them back.

I think there are a lot of one-off situations, that people can walk into a walmart and find a problem.

I think the inventory had been a little high, and like any good retailer, they have been cutting back in some spots and not in others.

Maybe this reporter found one e- mail from a supplier they know and they got that e-mail.

They say they are trying to manage the inventory levels.

We said in the second quarter quarter we would take broad- based actions, and i can assure you, we have not taken any broad-based action as of yesterday.

There is a lot being made out of this inventory situation.

Their sales trends have not been all that great, but they haven't been great for anybody else in that whole or.

But this is the first time we have seen something like this.

It gets to a bigger issue, what does this mean potentially for this retail season?

Walmart is the barometer of the economy.

It's going to be a soft holiday selling season.

I advised walmart's financial advisor for the family after sam walton died and told them walmart would not go the wrong way, and if i were devising the family today, i would say it is a rudderless retail organization.

Target, costco, cbs, they are all winning.

At their sales are necessarily great.

When we look back at the second quarter, it was not good.

The walmart core customer, it's not necessarily that they are going elsewhere, it is that they are spending less money because they don't have it.

It's not necessarily that they're going to a different store.

Retail sales in general are up about 4.2% year over year.

With analysts saying the earnings and walmart are only going to be up 2% for the fourth quarter him and retail sales in general are up over 4%, what does that tell you?

There is a lot of pressure in the market.

I think you are correct that holiday season is not going to be a terrific one.

As much as i've believe you will compress a lot of those cells into fewer days, it is still six fewer days, and you are going to lose a little bit of that normalized increased that you would get.

Maybe it is a good thing that the fed didn't taper.

That is one of the big questions here.

What is it telling us about the overall economic environment?

People are still struggling.

They don't have jobs.

If they have a job, they have not seen their wages go up.

At the end of the day, it is the consumer driving the retail sector.

The co-anchor tenants, customer accounts in all the penney-anchored malls are going down.

Their sales are all suffering.

Walmart is suffering.

The other retailers are positive, but not positive enough to bring retail up.

We want to see increases versus 2012, and we are getting worried we will see something like 2010. great to have you here.

Coming up, history says buy

This text has been automatically generated. It may not be 100% accurate.

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