Friday, January 29, 2016
Walmart Closing Over 200 Stores
Walmart, a huge retailer both in the U.S. and abroad, is planning to close 269 stores, after offering extreme discounts (50-75%) at these stores.
They have cited a loss in sales due to competition from online retailers, especially Amazon. According to the New York Times, "Amazon accounted for almost a quarter of all retail sales growth last year." This closure will result in an estimated 10,000 people losing their jobs.
Given that Walmart employs a whopping 2.1 million people, 1.4 million of which are in America, and has over 4,000 stores in the U.S. alone, this isn't an enormous hit for them, but it could signify a greater change in the future.
This also brings up the conversation of how little Walmart pays their workers. Their company minimum is $9/hour, which is above federal minimum wage ($7.25/hour), but still too little to live on. I think Walmart should pay their workers more - they plan to raise their company minimum to $10/hour in February, but this still isn't enough. There is some give in how much they can raise their workers' salaries without changing their business model, but I'm not sure how high they can actually raise their worker's wages before it starts interfering with their customers. According to Business Insider, Walmart is profiting 15 billion dollars a year, and more of this money should be going towards the employees. After all, Doug McMillon, the CEO of Walmart, made $19 million last year.
Do you think competition from online retailers will make warehouse brick-and-mortar retailers like Walmart irrelevant, or do you think Walmart can adapt to these changes? Should Walmart try to pay their workers more, and if so, how?