Walmart strains to keep grocery aisles stocked

Michelle Obama visited a Walmart in February to extol the fresh, healthy food in the company's grocery aisles.

But Walmart, Obama's corporate partner in a campaign to make food healthier and more affordable, has been running into problems with food that is not so fresh.

Walmart, the nation's largest retailer and grocer, has cut so many employees that it no longer has enough workers to stock its shelves properly, according to some employees and industry analysts. Internal notes from a March meeting of top Walmart managers show the company struggling with low customer confidence in its produce and poor quality.

"Lose Trust," reads one note, "Don't have items they are looking for — can't find it."

Walmart is addressing the grocery concerns with measures such as a new inventory system and signs that will help employees figure out what is fresh and what is not, Jack Sinclair, Walmart's U.S. executive vice president for food, said in an interview. Brooke Buchanan, a company spokeswoman, said Walmart considered its stores fully staffed.

Before the recession, at the start of 2007, Walmart had an average of 338 employees per store at its U.S. stores and Sam's Club locations. Now, it has 281 per store, having cut the number of U.S. employees while adding hundreds of stores.

"In its larger supercenter stores, Walmart can't keep the shelves stocked, and that is driving customers away," Terrie Ellerbee, associate editor at the grocery industry publication The Shelby Report, said in an email.

She traced the problem to 2010, after Walmart reduced the range of merchandise it carried in an attempt to make stores less cluttered. Customers did not like the change, and Walmart added merchandise back, but with declining sales then, it did not add back employees, she said.

Walmart charged into the grocery market about two decades ago. Grocery made up 55 percent of Walmart U.S. sales in 2012, which was flat from the previous year. The company's grocery prices are usually about 15 percent below competitors', according to Supermarket News.

Grocery has also been a centerpiece of its corporate responsibility strategy, as the company has trumpeted its support from Obama in selling healthy foods in underserved, low-income communities.

At the event with Obama in Springfield, Mo., the company said that it had saved customers $2.3 billion on fresh fruits and vegetables in two years, based on its produce prices, compared with those of competitors, and that it had opened 86 stores with groceries in so-called food deserts, where grocery stores are rare.