Retailers Quickly Find Use For Influx Of Consumer Cash

Fourth quarter earnings reports suggested that lower gas prices and the improving US economy have finally begun to translate into increased consumer spending, a relief for retailers who have been struggling with customers’ cost conscious behavior.

Improving sales have given big brands room to invest in future growth and Wal-Mart Stores, Inc. WMT has set the tone by raising employee pay and focusing its efforts on the customer experience.

A Better Class Of Workers

As hiring picks up in the US, it is becoming more difficult for low-paying employers to find motivated workers who will stick around.

With that in mind, Wal-Mart announced that it would raise the pay of its lowest-level workers to $9/hour with the possibility of another hike to $10/hour after completing the company’s training program.

By offering a higher wage, Wal-Mart execs are hoping to improve customers’ experience in store with a more engaged staff after ranking near the bottom of a customer satisfaction survey in 2014.

Related Link: Pinterest To Prove Quality Trumps Quantity

Wage Wars

Wal-Mart’s wage hike has also driven up the cost of hiring for some if its peers and caused other retailers to follow the discount super-store’s lead.

TJX Companies Inc. TJX announced on Wednesday that its workers would also see a raise to $10/hr, a move the company’s CEO hopes will reduce employee turnover.

Spending On Growth

Some companies are looking to use their extra cash in other ways, saying that their employee payment packages are already sufficient.

Target Corp TGT said it plans to spend on developing its online presence and offering customers a better selection of fashionable clothing and accessories. Macy’s Inc. M  is also upping its capital spending with a focus on international expansion and new store concepts.

Posted In: NewsRetail SalesTopicsTop StoriesEconomicsGeneral
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