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Half-million of Wal-Mart’s US workers to get pay raises

February 19, 2015

BENTONVILLE, Arkansas (AP) — Wal-Mart Stores Inc. is hoping its decision to boost workers’ paychecks will help it boost its bottom line.

The largest private employer in the U.S. announced on Thursday that it’s giving a raise to about half-million U.S. workers as part of a $1 billion investment that includes changes that Wal-Mart says are aimed at giving workers more opportunities for advancement and more consistent schedules.

The changes come as the company has faced increased pressure to pay its hourly employees more. But Wal-Mart, which has been criticized for its messy stores and poor customer service, says it’s also focusing on recruiting and retaining better workers so that it can improve its business.

The company has struggled with disappointing sales for most of the past two years, even though it posted better-than-expected results during the most recent holiday season. Wal-Mart hopes that taking better care of its workers will lead to better-run stores, more satisfied customers and an increase in sales and profits.

“What’s driving us is we want to create a great store experience for customers and do that by investing in our own people,” Doug McMillon, Wal-Mart’s CEO, told The Associated Press during an interview two days ahead of the wage announcement at the company’s headquarters in Bentonville, Arkansas. “A better store experience results in happier customers, resulting in stronger sales.”

Wal-Mart’s changes indicate that it is moving beyond relying on its hallmark everyday low prices to make it stand out in an increasingly crowded and competitive retail landscape and moving toward investing in its workers. The company had previously cut back on staffing in stores two years ago in an effort to be more efficient.

But the moves have backfired. Morale among workers was low at stores, employees weren’t able to quickly restock items on shelves and shoppers came to expect unkempt stores. Wal-Mart’s U.S. business, which accounts for 60 percent of its net sales of $482 billion, had declines or no growth for the past eight quarters. And an annual survey by the American Customer Satisfaction Index, which polled 70,000 customers, found that Wal-Mart’s customer satisfaction fell to the lowest level since 2007.


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