Retail

Is Walmart in Trouble?

Douglas A. McIntyre

Published: May 14, 2024 6:40 am

According to several media reports, Walmart Inc. (NYSE: WMT) is laying off workers. Most appear to work in offices, and the count is in the hundreds. Some people working remotely must return to the office or be fired. However, one media account mentioned Walmart’s plans to have 65% of its stores operating with some level of automation within less than two years. If the downsizing has not happened in this round of layoffs, it likely will soon.

Walmart remains the only retailer in the country within miles of most American homes. It has mostly rebuffed the challenge from Amazon.com Inc. (NASDAQ: AMZN), which has damaged or taken some retailers under. Its website, Walmart.com, is believed to be the second largest e-commerce site in terms of traffic after Amazon.com. (If You Invested $1,000 in Walmart 20 Years Ago, Here’s How Much You’d Have Today)

However, Amazon’s retail business continues to grow faster than Walmart’s in the United States. It is hard to imagine that some Walmart shoppers don’t use other e-commerce sites for some of their shopping.

Walmart also has to face inflation, which continues to sap the buying power of middle-class and lower-class American families, who are at the heart of Walmart’s customer base. Inflation has been stubborn despite the fact it has fallen in the past year. A Gallup poll found that “Sixty-three percent of U.S. adults in January 2024 say recent price increases have caused severe or moderate financial hardship for their household.”

Are the Walmart layoffs a sign of things to come? They certainly can be.

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