Walmart CEO just threatened more store closings and higher prices
The company says it is currently facing a serious problem in certain places.
If you are like millions of buyers, there is a good chance that you are heading to Walmart to pick it up, from the fast grocery store to the largest ticket items like electronics. Many rely on the store For its convenience And prices reliably, making it the Go-To for the essentials even before inflation becomes a growing problem. However, the retailer is always faced with many of his own problems which he must solve to remain profitable - which can involve closing certain locations . And now Walmart CEO has threatened that more store closings and higher prices could drop. Read the reason why the company is in difficulty at the moment.
Read this then: Walmart is under fire to do this to buyers - look for these 3 words .
Walmart has recently closed stores, but manages inflation differently from other retailers.
It is no secret that the The retail industry has trouble In recent years, faced with the evolution of trade models and unforeseen emergencies. As if the difficult recovery of the COVVI-19 pandemic was not sufficient, many now face the stress of inflation or labor shortages that lead to store closures. But even as the largest retailer in the country, Walmart was fortunate to avoid many of the same problems.
Earlier this year, business managers explained how its low price strategy Use of "rollback" sales panels could help make customers come back to rise in tight prices and budgets . "We use declines to communicate not only the reality of prices decreases in certain places, but the emotion or the perception that we want customers to have about us", " Doug McMillon CEO of Walmart told analysts at a post-benefit call conference in February, according to CNN.
Of course, the company was not entirely safe from Current economic realities . He has closed more than 160 stores in 27 states in the past six years, according to Pluain-be-shopping.com. Depending on the company, restructuring can often be said to keep an eye on The bottom line , as in the case of a Closed location in Pittsburgh end of October.
"This decision was not taken lightly and was only reached after a deepened examination process," said Walmart spokesman Felicia McCranie told CBS News. "Our decision is based on several factors, including historical and current financial performance, and is in accordance with the threshold that guides our strategy to close the underperforming locations." But now, the best brass in the company precedes more changes could happen.
Walmart CEO simply warned that more store closings and higher prices could be in the near future.
During an appearance of December 6 on CNBC Squawk box , McMillon has spoken of some of the recent difficulties The company has been faced. More specifically, he highlighted a flight peak as a continuous problem influencing some of the retailer's decisions.
He also underlined the issue of prosecutors who do not apply laws that prevented criminals from stealing shelves, saying that a non-compliance with the problem could cause serious changes on the line. "If this is not corrected over time, the prices will be higher and / or the stores will close," warned the CEO of Walmart.
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He explained that display rates are "higher" than usual for the retailer.
McMillon explained that the company currently saw more display flights than usual. "Theft is a problem. It is higher than it was historically," he told CNBC during the interview.
Although he has not cited a specific number, the retailer previously shown that he was no stranger to Significant withdrawal rate . In 2015, the company said it lost $ 3 billion due to the flight each year, representing one percent of its annual revenues of $ 300, Reuters reported.
The CEO of Walmart continued by explaining that the company had started to solve the problem with the systems it already has in place. "We have security measures, security measures that we have implemented by the store. I think the local police are equipped with personnel and to be a good partner are part of this equation, and This is normally as we are approaching, "he said.
The executive did not say which areas were specifically in danger of seeing store closures.
Despite the disastrous warning, McMillon did not give any details as to the areas more at risk of closings of permanent stores in the near future. "It's really City by City, location by location. These are store managers working with local police, and we mostly have excellent relations," he told CNBC .
However, the retailer already seems to be take the question seriously . In a recent investigation into several Walmart locations in Los Angeles, it has been found that specific high -end shampoos and cosmetics were held behind a partitioned area which required an immediate purchase before customers could at the rest of the store, the Los Angeles Times reported. Other articles, such as men's underwear, were locked up on the shelf and required the help of a partner to remove from a plexiglass case.
"No retailer is safe from theft, and Walmart is not different," said Walmart spokesperson Charles Crowson said to L.A. Times in a report. "However, we do not discuss specific details of illegal activities or security situations in our stores."
Walmart is not the only large retailer faced with flight problems either. Last month, Michael Fiddelke , Target financial director, said his company had seen the display flight Jump 50% Compared to the previous year, CNBC reported. The losses have totaled more than $ 400 million this year, which he blamed in the flight rings organized instead of small or punctual thieves.
