Wal-Mart Situation "Getting Worse" New Leaks Reveal

Tyler Durden's picture

Two weeks ago, Wal-Mart stunned the world when a leaked memo discloses that February sales had been a "total disaster" and the company was facing the worst February start since 2006. Today, Bloomberg's deep throat in Bentonville strikes again, as a new leak emerges. "Wal-Mart Stores Inc (WMT), already struggling to woo shoppers constrained by higher taxes, is “"getting worse" at keeping shelves stocked, the retailer’s U.S. chief told executives, according to minutes of an officers’ meeting obtained by Bloomberg News. "We run out quickly and the new stuff doesn’t come in," U.S. Chief Executive Officer Bill Simon said, according to the minutes of the Feb. 1 meeting. Simon called “self-inflicted wounds” Wal-Mart’s “biggest risk” and said an executive vice president had been appointed to fix the restocking problem, according to the minutes."

So even as the market completely ignored the Wal-Mart revenue issue, which is "getting worse", the bigger problem is that now it appears to be affecting the company's supply-chain, which likely means that all of WMT's upstream vendors are suffering from the same malaise that has gripped all those entities that still rely on such historical trivia as profitability and cash flow:

Wal-Mart’s inability to keep its shelves stocked coincides with slowing sales growth. Same-store sales in the U.S. for the 13 weeks ending April 26 will be little changed, Simon said in the company’s Feb. 21 earnings call. Comparable sales increased 1 percent in the fourth quarter, compared with an average of 1.4 percent from analysts surveyed by Bloomberg. This year the shares gained 4.2 percent through yesterday, compared with a 5 percent advance for the Standard & Poor’s 500 Index.


Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”


“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”


Cruz, 41, who has worked at Wal-Mart for nine years and oversees the photo and wireless sections at her store, said it can take weeks or months for merchandise to be replaced after it sells out.


“My camera bar hasn’t had cameras since early January,” she said. “They let the merchandise phase out but nothing new comes in to replace them. We’re supposed to have 72 cameras but we maybe have 12. What are customers supposed to buy?”

Sure enough, WMT again has pre-canned (pardon the pun) excuses for what this second leak is supposed to mean:

“There’s a number of misinterpretations and half- thoughts” in the documents, which were not official company minutes, David Tovar, a Wal-Mart spokesman said in a telephone interview.


When Simon said things were “getting worse” he was referring to “modular changes,” the process of replenishing merchandise to keep up with customer demand and changing seasons, Tovar said. Wal-Mart is working to “manage this in the most efficient way possible,” he said.


“We’re very pleased with our in-stock position,” he said, adding that products audited by the company and its consultants match or exceed historical levels. He declined to disclose what those levels are.


Tovar declined to make Simon available for comment

Naturally, following WMT's earnings, which showed that in the fourth quarter all was well, the market promptly forgot the recent "totally disastrous", completely oblivious that February is in the current quarter, and the management is obviously stonewalling the reality facing the retailer.

Yet if indeed there is a major issue affecting the world's most efficient logistical chain, what can other retailers say? And what are the implications for all other global trade routes, both macro and micro? Because if trade, which has been a casualty of central planning for years, is buckling, then is the scenario so vividly described in ""Trade-Off": A Study In Global Systemic Collapse" finally starting to come true?

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reader2010's picture

So that's bullish for China?

GMadScientist's picture

Night, Jon Boy!

Night, Pepina!

Night, Grandpa!

The Gooch's picture

I bought a desk lamp from the Waltons in 1993.

I plugged it in and it started on fire.

You reap what you sow, Waltons.

Nowhere to hide, Waltons, et-al.

The ghost of my desk lamp illuminates your every move.


UnpatrioticHoarder's picture

Reminiscent of the last days of the USSR - empty shelves and crap merchandise.

The Gooch's picture

Would the Pro Wal-Martians please step FOARWARD!

TruthInSunshine's picture

For those who are having trouble finding what they want or need to buy at Walmart, for whatever true reason that's behind this apparent development, just go new vehicle shopping to take your mind off of things, given the incredible strength of Ben Bernanke's 'Virtuously Circular' policy driven economic recovery:

New Cars Increasingly Out of Reach for Growing Number of Americans

Looking to buy a new car, truck or crossover? You may find it more difficult to stretch the household budget than you expected, according to a new study that finds median-income families in only one major U.S. city [fucking parasitic, taxpayer-sucking Washington D.C....whocould'veknowit?] actually can afford the typical new vehicle.

The typical new vehicle is now more expensive than ever, averaging $30,500 in 2012, according to TrueCar.com data, and heading up again as makers curb the incentives that helped make their products more affordable during the recession when they were desperate for sales.


According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments, the median income there running $86,680 a year. At the other extreme, Tampa, Fla., was at the bottom of the 25 large cities included in the study, with a median household income of $43,832.

The Gooch's picture

Cue HH and the Suburban ad...

(in a good way)

prains's picture

I wish I had something smart to say about wal mart but unfortunately they represent the melancholy of the american condition

and as they go so does the american dream, which really for most is a mightmare

Divided States of America's picture

Rows of shelves missing merchandise all over the entire store? Are you sure that is a supply chain problem or could it be that the underpaid Walmart employees are now taking merchandise home as part of their 'new method' of being more compensated.

TruthInSunshine's picture

I have a strong suspicion many retailers aren't re-stocking a very large % of products that they don't think they'll easily sell (at least at a price that would allow them an actual profit).

But this is mere conjecture on my part based on anecdotal observations, conversations and my spider sense, admittedly.

prains's picture

I'm not sure profit is wal marts problem given the overt wealth the walton family has been able to accrue. Their real problem may be far more insidious

but what the fuck do i know, their chauffeur could buy and sell me like a cheap bangkok trick

YBNguy's picture

Clearly why Walmart is for mandatory background checks for all purchases/transfers. They want to tap that private sale market and are throwing a Hail Mary by putting themselves behind Obama. They will reap what they sow.   

Supernova Born's picture

Empty shelves, empty supply chain?

The tide going out before the tsunami.

merizobeach's picture

It's hard for me to buy things from Wal-Mart because I will never step foot in their fucking stores.  Simple as that.

MisterMousePotato's picture

I noticed the same thing in our local K_Mart this last weekend. Wandering into the electronics section to kill a moment or two while my wife wasted mo-, uh, shopped, I noticed that the camera display had maybe five or six cameras in a display built for, I dunno, thirty? Forty? Too, on the front of the display, below the camera, uh, cameras, there were hooks and stuff to display other products (no idea what), but whatever was supposed to be there, wasn't. I mean, not a single thing hanging there. The rest of the section was also kinda empty. Ten or 15 feet of shelving with four products (HTIB), one of them being an orphaned speaker left over from something, and not for sale.

It was really kinda weird.

Moe Howard's picture

This is not weird. The same thing happened at Kmart when they went bankrupt. The first thing not stocked was electronics.

I suspect Sears/Kmart is soon to go bye bye.

Supernova Born's picture

"Little Munchkin" Mayor Bloomberg is a HUGE financier of anti-Second Amendment politicians across the USA.

Walmart is a HUGE seller of guns and ammo across the USA.

No tension there.

GetZeeGold's picture



All the socialists hate Walmart.


They shop at Whole Foods cause the CEO is a true Capitalist.

BurningFuld's picture

Don't get it do you? WalMart is socialism to the extreme. As you think about Walmart, think about the MASSIVE burden they are to the state.

MachoMan's picture

So could you please tell me how much each walmart employee would cost tax payers if walmart wasn't employing them?  The simple fact is that walmart provides soup lines better than other government leaches (and probably more efficiently/cheaper than the government could).  In short, your analysis leaves much to the imagination given the state itself is nothing but a burden to the people...  this creates cause and effect problems when you begin singling out particular retailers.

There's no doubt that walmart benefits from the fact that there is a social safety net that its employees can receive...  however, relatively speaking, I'm not sure it's different from any of its peers (COSTCO being a glaring exception; although it would be more appropriately compared to sams club than walmart proper)...  If you incentivize rational actors to suck on the teet, they will suck on the teet...  I'm not sure "burden" is the correct term when the state desperately tries to create dependents...  again, cause and effect gets tricky.

jerry_theking_lawler's picture

i bet it is simply 'managing' inventories to get the desired earnings value.......


if you look for short term stock gains, most of the time long term gains will suffer.

unrulian's picture

i don't know about the rest of the store...ive never seen it, but the ammo case certainly is bare

MachoMan's picture

The local walmart guys are telling folks when the shipments come in so that everyone has a chance to get guns and ammo instead of the local pawn shops and outdoor shops buying it all up and reselling it.  According to them, the demand is insatiable, but the supply is starting to pick back up.

myptofvu's picture

I have to shop at WalMart being it is the only store remotely close to me. I've gotten to know some of the employees and Managers, the moral for workers is high and they are quite happy with their jobs and their company. As far as the empty shelves go, my exact words were the same as as in the article "it looks like they're going out of business". My first thought was that is was a resupply problem due to the location being so rural until I discovered that the main distribution hub for the entire state is just down the road from my store lol.

Race Car Driver's picture

> I have to shop at WalMart...

I junked ya for bein' a bald-faced, filthy liar.

myptofvu's picture

Okay I don't Have To but it takes me 1/2 hour to drive to Walmart I don't want to drive an additional 20 minutes to another town and in the Summer I do HAVE TO because of the heat here to keep things form melting or spoiling on the drive home. Even going to Walmart I sometimes end up throwing things out because they went bad on the drive home. Okay I don't have to do that because I guess I could buy a big cooler and ice and transport perishables that way but I DONT WANNA.

Navymugsy's picture

So I'm not the only person who gets depressed as soon as they walk into a Walmart?

Race Car Driver's picture

I junked ya for goin' to Wal-Mart - and then coming here and whining about it like someone made you do it.


ejmoosa's picture

Just can't blame Wal Mart.  Too many mom and pop stores gaves us higher prices and shitty service. 


We can get shitty service at a discounted price at Wal-Mart.

catacl1sm's picture

I like to go into Wal-Mart open carrying my sidearm to check for ammo. I rarely come out of there with anything.

Temporalist's picture

Tie a string to a double quarterpouder with cheese or dounts and drag it behind you.  You'll come out of there with something. 

tom a taxpayer's picture

The hypocritical, parasitic, taxpayer-sucking Washington D.C mofos should pass a law requiring that the only cars sold in D.C. be all electric or get 50 miles to the gallon or be solar or wind-powered. Or, better, cars should be banned from D.C., and the only urban surface transport allowed to be sold are bicycles.

D.C. mofos, stop preaching and start pedaling!



FeralSerf's picture

What would they do with all those black Chevrolet Surburbans?

dunce's picture

Obama ordered his new chief of staff to stop riding his bicycle to work. I do not know if that means that he must take the bus or what. Lord have mercy on us.

Larry Dallas's picture

The only thing Tampa is good for is herpes and Waffle Houses...

TruthInSunshine's picture

And Pill Mills

(Not that the legislative blunt hammer is the correct or even remotely effective tool to "deal" with such matters; history has taught us time & time again that passing legislation and imposing criminal sanctions for supplying or using products that the market craves never succeeds, and merely boosts the profitability of grey and black markets, which coincidentally results in mass violence, wasted taxdollars for futile attempts in enforcement of futile legislation, etc.; as a libertarian and rationalist, we must concede that "if one flaps their arms violently yet neither strikes nor injures any innocent bystander, there is no impetus or logic to use the force of law to address such arm flapping.")

Common_Cents22's picture

the only way you get a good deal on a car these days is through a broker/small dealer that agrees to find you a car at the dealer auctions such as Manheim for a fee or directly from the car finance divisions for off-lease vehicles.   =true dealer cost because that's where they get'em.

ghostfaceinvestah's picture

yup, that is the way to get the best deal - pay wholesale.

Karlus's picture

I had a dealer license and bought at Manheim. You wont get the deals you think you will. In addition, many of these cars are deliberately dumped because of some inherit flaw. Sure Manheim will sell you 3 day insurance on a buy at huge premium, but good luck.

Best way to buy is mano-y-mano and if its a concern, pay a mechanic the $100 for a check.

CaptainObvious's picture

I live near the Manheim Auto Auction (which is slowly taking over Manheim acre by acre) and you never get quite the steal you think you're getting.  Many of the cars are beat-up rental cars shipped up from Florida and have rust in places cars should never have rust.  These cars are purchased from the auction by all the local dealers and the prices are jacked up 150%. A lot of drug dealers use Manheim to ship their drugs up from Florida. In my area, you get the best deals from private sellers who bought their cars new, which is how I've purchased cars for the last fifteen years.

OldPhart's picture

Bought a 2013 Kia Forte on Sunday...and I have the credit score of a meth addict.

freshfart's picture

I own a 2012. Don't enjoy lining the pockets of S Korea but at the same time I won't line the pockets of some overpriced shitheap like GM. 


caShOnlY's picture

New Cars Increasingly Out of Reach for Growing Number of Americans

All you have to do is look to our great friend and trading partner to the north:  8 years car loans, 5 year leases.  Where else can a ex - Sri Lankan goat farmer buy a Lexus while working at Pizza Pizza?    Eventually GM will introduce the "new 120 month GM value loan". 

Did anyone ever notice that Canada, population LESS than Californina, is our Number 1 great friend and trading partner and has more wealth per person than the U.S.?  It has the 11 largest economy on the PLANET!!.    Don't tell the 48 million on food stamps that NAFTA wasn't good for them!!!!   

CheapBastard's picture

Sales must stink since I see a puckup commercial every 3 minutes on TV for that 420000 ton truck that every proud American NEEDS to own. I'm holding on to my ten-year-old jalopy until Barry hands out "free" cash for clunkers again (limited to GM vehicles only).


No way i"m buying another one now because...


I'm a Cheap Bastard !

sgt_doom's picture

Outstanding comments, Truth, outstanding!

Of course, that was the game plan all along, with the dismantling of the consumer-based economy (top 15% account for the vast majority of that 70% consumption figure always bandied about - which Robert Reich, that mental pipsqueek never gets???) and their replacement of a fantasy finance-based "economy" - - only employing around 7.8% of the existing workforce (and they will end up offshoring most of those jobs, 'natch!), the long-range design was to reduce the majority of each country to serfs, while selling to the wealthier typies around the planet, and employing small numbers from each existing middle-class around the planet --- their globalization plan/WTO/privatization agenda.

Appears to be working great for them, not too well for the rest of us serfs, though!

BLOTTO's picture

Soon afterwards, Sam Walton joined the military in the U.S. Army Intelligence Corps,


Walmart 'sun' logo = Hagall rune?


The Hagall rune was widely used in the SS for its symbolic representation of "unshakeable faith" in Nazi philosophy, as Himmler put it.[7] It was used in SS weddings as well as on the SS-Ehrenring (death's head ring) worn by members of the SS. It is roughly similar to the ? or Haglaz rune of the Younger Futhark, which stood for "hail", but it was modified by von List for his Armanen runes. List considered it to be the "mother rune" of his runic alphabet and envisaged it as a representation of a hexagonal crystal




They follow a different set of law based on sacred geometry, astrology and numerology. 


Occult shit show

HondaFullOfSilver's picture

Sure, why not? I like WalMart and I like the fact that these guys have their eyes open.  I absolutely hate it when I had meetings and the PM was congratulating some vendor for barely (or not) getting some job done on time..  They did it every week, why the hell could they get right?  No, not "great job" - how about "why do you keep screwing up, how many of these have you done?"  These guys see their issues and I suspect are working to address them.  It's crappy out there, why sugar coat it?  Walmarts primary customers have experienced a world of hurt over the last few years, and I do not see that abating.

In short, seeing the problem is the first step.  I can turn on MSNBC and see denial anytime.