Faced with growing competitor from online retailers like Amazon, and offline retailers like Aldi and Costco, Walmart finds itself in a position of flat sales and an impending fall in profits The Walmart retail model of low costs – achieved through low salaries and bulk buying discounts – is no longer enough to help the company keep its sales graphs buoyant. Earlier this month the company revised its profit and sales outlook for the year, saying profit could drop by as much as 12% next year and that sales this year will likely be flat. The Company is taking a number of steps to address this including an increased spend on its online business and a relook at its customer experience levels. The company recently brought back greeters to its stores to improve customer service even as they hired "asset-protection specialists" to check customer receipts and help reduce theft. The retailer also recently began authorizing store managers to match prices found on Amazon and other websites to better compete with its rivals.
Separately Walmart is making changes to its stores to make shopping easier. First, the retailer is cutting down on the number of products it sells in its giant supercenters. Instead of selling six different sizes of the same brand of ketchup, for example, the stores will only sell one or two sizes of the condiment. The retailer has already cut roughly 2,500 items from its supercenters, which typically carry about 120,000 products. The company is also lowering the height of shelves near checkout areas by roughly one foot to make it easier for shoppers to see the whole store when they walk inside. That may seem like a relatively minor change, but it will wipe out hundreds of millions of dollars in annual sales of gum, candy and magazines. Walmart is taking these measures to improve the store experience and drive traffic and sales growth even as the increased hires and rising wages required to retain works further eats into profits.