28 September 2015

If You Treat Your Employees Like Crap, It Flows to the Customer

It turns out that the Wal-Mart grocery business is lagging, because they suck at running supermarkets:
Wal-Mart's grocery business is getting crushed by competitors, according to analysts.

The retailer is plagued by negative customer feedback "due to lack of convenience in shopping Supercenter formats, below-average customer service, and below-average quality, freshness, and breadth of produce," Wayne Hood, an analyst at BMO Capital Markets, wrote in a recent research note.

As a result, Wal-Mart is losing grocery market share to rivals like Kroger and Publix, which have higher customer satisfaction ratings than Wal-Mart, according to Hood.

That's a troubling sign for Wal-Mart, which gets more than half of its revenue from groceries, and has been consistently offering lower prices than its rivals, Hood writes.

Grocery prices at Wal-Mart are approximately 10% to 15% lower at Wal-Mart compared to Kroger, according to Hood.

But the lower prices have failed to spur growth in Wal-Mart's grocery business, as illustrated in the graph below.

Basically, Wal-Mart sucks, but they are cheap.

Of course, dollar stores are cheaper and they are not suckier, and Target is a bit more expensive and much less sucky, and now it turns out that even the lowly supermarket chain produces stores that people are wiling to pay extra to go to.

Couldn't happen to a more repulsive company.


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