Walmart (NYSE:WMT) In The Limelight Again – For All The Wrong Reasons


As the holiday season approaches, everyone can feel festivity in the air. Besides other things, one factor that everyone awaits throughout is this time of the year, where retailers put attractive discounts on their merchandise to ensure maximum sales. In order to make the holiday season a success for themselves, retailers try their utmost to ensure a happy shopping experience for customers, and in this regard, they try to keep a happy team of employees.

Walmart (NYSE:WMT) however, might be thinking otherwise as the retailer finds itself in trouble again. This time, it is employees demanding higher wages and full-time job statuses along with the freedom to speak out without fear of reprisal.  The Walmart (NYSE:WMT) stores are becoming a site of protests held by workers, which is not exactly the look retailer wants to be in during this time of the year. The latest development is addition of two more studies that advocate employees’ point of view.

Michele Simon in a study titled, ‘Walmart (NYSE:WMT)’s Hunger Games’ struck severe lashing at the retailer, calling it a ‘profit building empire’ that builds its wealth off of workers compulsion. The study discloses that 88% of employees have wages below $25,000 per annum. The employees are demanding to be paid at least that amount and to have full-time working hours.

Walmart (NYSE:WMT) is also in trouble with their tax payments. According to another study released by AFT; American for Tax Fairness, it has been revealed that the retailer escape nearly $1 billion per annum in taxes payable to the US government through loopholes. The retailer makes $6.2 billion in subsidiaries, due to low wages paid to employees on the basis of their reliance on SNAP.

According to some other revelations as per the AFT study, Walmart (NYSE:WMT) is expected to evade $720 million worth of tax payments, due to 35% to 25% reduction in tax rates. The retailer is expected to save tax on revenue from its off-shore setups worth $21.4 billion. The company doesn’t have to pay tax on this amount as it is not on US soil and hence US tax regulations don’t apply. While organizations like AFT are working to eradicate these rulings, establishments such as Walmart (NYSE:WMT) is making strenuous efforts for tax reduction and elimination of tax on off-shore revenue.

Quite recently, Walmart (NYSE:WMT) released figures for Q3, that report growth in same-store sales for seven quarters. Walmart (NYSE:WMT) translates this growth, as a result of Inflation and was reserved by its ‘SNAP headwinds’.

The SNAP federal funding has dipped from $76 billion in 2013 to approx. $64.3 billion in financial 2014. A total of $13.5 billion fell to Walmart (NYSE:WMT) in 2013, due to SNAP. The total SNAP benefit for Walmart (NYSE:WMT) fell to $2 billion, according to estimates reported in 2014.

The dispute between Walmart (NYSE:WMT) and its employees is being termed a David verses Goliath specter. The retailer might stand up to criticism as of now, but it’s not the best idea for long term.