Walmart makes lucrative changes to improve cash reserves

Walmart makes lucrative changes to improve cash reserves

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Walmart Stores, Inc. (NYSE:WMT) is making new lucrative changes to improve its cash reserves. The world’s largest departmental store is going to take charges from suppliers on stocking and warehousing their inventories. Earlier this year the firm has also took bold step to discard joint promotion ventures with retailers intended for products in an attempt to save money.

In a letter to the approximately 10,000 suppliers affected, Walmart said the purpose of the change was to bring “consistency to the collection of allowances related to the growth of our business and suppliers’ use of the Walmart supply network.”

According to Walmart is would charge more than 10% on food products, depending on the value of the stockpiles shipped to new stores and warehouses from sellers and get 1 percent on inventory in currently existing storehouses. This is the first time that the firm is using such technique as previously the firm avoided such tactics in order to get the products from the suppliers at lowest rates possible.

The new initiative makes some sense as the company is bolstering the wages of its employees and further reviving its online e-commerce website. A representative for Wal-Mart said that “The changes we have outlined will help us ensure that we are operating at everyday low costs that yield everyday low prices.”

The firm in past has been well-known for its lower priced products. The firm has been criticized by the unions and interests on paying low wages to employees and simultaneously it hasn’t been good at providing customer services. The firm has also used the bribery techniques to tackle the legal battles.

The new CEO Doug McMillon is putting serious efforts to win back hearts of customers as the firm is continue to suffer in the hands of peers like Amazon.com and Costco Wholesale despite showcasing products at lower rates.

At the start of the current year, McMillon disclosed a new plan which surprises the employees as the CEO increased the wages of minimum-wage employees, to provide better customer services. That’s a good move by the CEO.

Walmart is in a restructuring phase but it appears that the firm is making right decisions to revive growth at company shrinking business. Let’s see what kind of results the new decisions will reap in the future for the firm.

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I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.

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