Walmart is now coming up with two major revisions to its stores to make shopping as effortless as possible.
Wall Street Journal's Sara Nassauer reports, first, the retailer is to dispatch on the number of products it sells in its huge supercenters. Rather than selling six various sizes of the same brand of ketchup, for example, the stores will only sell one or two sizes of the product.
The retailer has already trimmed down roughly 2,500 items from its supercenters, which normally carries about 120,000 products. Walmart is also making a modification to its store's features.
Walmart has decided to lower the height of their shelves near checkout counters by approximately one foot to make it more convenient for shoppers to look at the whole store when they walk inside. She adds, that it may suggest a relatively minor kind of change, but that will wipe out hundreds of millions of dollars in the yearly sales of gum, candy and magazines.
According to Nassauer, both resolutions made by Walmart are causing resistance with suppliers, because they will result in lost sales. But Walmart needs to develop its stores to run traffic and sales growth.
Walmart's stock took a beating this month when the company improved its acquisition and sales outlook for the year, saying profit could be cut down as much as 12% the following year and that sales this year will likely to be flat, compared to a gain of 1% to 2% that was already anticipated in February.
The news sent shares a deep-cut by as much as 10%, which marks the retailer's lowest one-day drop in a period of ten years. According to some analysts, Walmart's challenges come in part from its business framework, which is already becoming obsolete.
For decades now, Walmart produced great profits by keeping their employees' wages low and using its extensive share of the retail market to transact the lowest prices from their suppliers. But today, Walmart is increasing their compensation to attract and keep workers in an increasingly competitive retail labor market, and that's consuming into profits.
The retailer is also facing a developing struggle on pricing and ecommerce from several companies such as Costco, Aldi and including Amazon. Walmart has been spending massively in its stores and in ecommerce to rebut its competitors.
