Tesco (NASDAQ: TESO), the largest retailer in the UK, said it would add 20,000 jobs between now and 2014. It is the largest employer in the UK, with 270,000 workers. The move is an aid to a troubled economy. Tesco even managed to get a comment from the UK prime minister. David Cameron said how important the action was to a nation that continues to struggle with jobs.
Walmart (NYSE: WMT) is the only company in U.S. that is equivalent to Tesco. It is the largest employer in America, with more than 1 million workers. But Walmart’s last jobs action was to cut 11,200 people at its Sam’s Club locations in early 2010. Mike Duke will not stand hand-in-hand with President Obama to announce that Walmart will help improve the U.S. jobs market.
If Walmart were to add proportionately the same number of jobs that Tesco did, it would increase its U.S. workforce by 70,000. But the company is under pressure from investors to improve American profits and same-store sales, which have barely been better than 1% in the past few years. However, some Wall St. critics claim that Walmart’s decision not to do more with its U.S. locations has allowed Target (NYSE: TGT) and Costco (NASDAQ: COST) to improve their locations by making them more modern. Walmart, this school says, has not used its powerful balance sheet and earnings to reinvest in the United States. Rather, it has added tens of thousands of jobs in places like China, which the retailer believes are essential to its growth.
Walmart will not upgrade its locations in the U.S. It clearly believes they are “good enough” to maintain sales as they are. The fault with that reasoning is that the company continues to lose ground in American market share. But it will not take the sort of action that its UK counterpart has.
Walmart is no Tesco.
Douglas A. McIntyre
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