Higher wages at Walmart: What’s the driving force?

Walmart (and some other retailers) recently announced starting wages in the $9-$10/hour range, depending on experience. The sheer size of Walmart helps redefine the “minimum wage” for the marketplace in an era of rising competition for opening-wage workers. But it’s not just about the falling unemployment rate, but also about the very real need for Walmart to improve its service levels.

Here’s my comment from a recent RetailWire discussion:

I agree with the comments about service as an underreported part of Walmart’s problems. Think about the issues discussed recently on RetailWire, regarding the challenges keeping fresh meat and produce on display, in a “lowest common denominator” service environment like Walmart.

The announcement yesterday about higher wages is a tacit acknowledgment of this problem, especially heading into an era of higher employment and labor shortages. It’s not accident that some of the highest-paying retailers (Costco, for example) have higher satisfaction ratings among both shoppers and associates. Maybe Walmart is finally figuring this out.


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