Brian Sozzi Goes Undercover at Wal-Mart
Brian Sozzi, retail guru from Belus Capital Advisors, has uncovered new problems for Wal-Mart (NYSE: WMT) after stalking some locations in person.
Over-ordering of seasonal merchandise is a “long-chronicled problem area” for Wal-Mart, Sozzi said. Sozzi believes the company is doing a poor job of adjusting inventory to economic conditions as Wal-Mart “continues to be in the business of ordering non-essentials as if the underemployment rate was 6% (it's well north of 10%).”
In the Belus note, Sozzi has videos of Easter merchandise lining many of the store's aisles, some of which still needs to be unpacked.
Sozzi is also critical of Wal-Mart's employee labor scheduling system that was rolled out in 2007 with the goal to cut labor costs. Sozzi believes the system “needs to be overhauled to account for how people are shopping following the upheaval in the U.S. economy and advance mobile consumption.”
Customers shopping between 7:00pm and 9:00pm are greeted to long checkout lines, while the majority of lanes are unstaffed. While in line, customers are “taking to Twitter to voice their disgust in real-time regarding Wal-Mart's lack of customer service.”
Shares of Wal-Mart are unchanged in pre-market trading and have been range bound between $72 and $80 for over a year.
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