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Why Walmart has a problem with having too much stock

By Nithya Bose in Business News, posted July 25, 2022

Back rooms and storage facilities at several Walmart stores are crammed with unsold goods, which is making it difficult for staff to do their work.

The company has seen a 32 percent rise in inventory due to inflation and supply chain issues, and now is having to "work through" its "excess goods", according to CEO Doug McMillon.

The supply problems during the Covid pandemic meant Walmart and other retailers went on a stocking frenzy.

Shortages of products like toilet paper led to the retailer ordering a massive amount of stock that exceeded customer demand.

Now, employees who work in the backrooms of Walmart stores across the country recounted numerous pallets that made the floors practically impassable.

The mounds of boxes have hampered access to places like private breastfeeding rooms and toilets, and outdoor trailers loaded with surplus inventory.

A Walmart spokesperson said: "Nothing is more important to us than the health and safety of our associates and customers."

"As inventory has become an issue for all retailers, we've increased our focus on creating a safe working environment.”

Several Walmart employees have said that the new inventory system automatically orders supplies the stores already have.

A Minnesota Walmart store employee said: "Right now at my store, we are getting slammed with nonstop freight.”

"We have hit a terrible point where the system auto-orders more of the stuff we already have."

The new system does not account for products that are not labeled or placed in bins by employees when they arrive at the store.

The employee said staff don't have enough time to sort the packages timely, leading the system to automatically order the same items again.

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Another employee who has worked at an Ohio Walmart store for almost a year said the back room "has people standing on the pallets they're putting freight on because there's no room — it's nuts."

An Indiana employee at a Walmart store added: "I can't even get close to the pallets I need. Our store has never looked this bad. It's just overwhelming at this point."

Employees said that the freight deliveries have also remained erratic.

Walmart has been pushed to acquire more storage space due to the overstock crisis.

Workers said their stores were required to store surplus inventory in trailers.

To combat overstock, Walmart executives have stated that they will use rollbacks, or discounts on products for a certain period, with the goal of selling more stuff at a faster rate.

Source: Insider

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