Walmart, the largest private employer in the U.S., has recently reduced the starting pay for new store employees responsible for picking and packing online orders and stocking shelves. The pay cut has raised questions about whether this reflects a cooling labor market or an adjustment to pre-pandemic shopping behaviors.
The pay reduction, which took effect in July, impacts personal shoppers and stockers who have recently joined the company. These employees are involved in preparing orders for curbside pickup or home delivery and restocking store shelves. New Walmart employees in these roles now earn approximately one dollar less per hour compared to those hired a few months earlier.
Walmart emphasized that current employees in these positions did not have their pay reduced. Additionally, the company adjusted pay bands for more experienced employees, resulting in wage increases for around 50,000 store employees.
Walmart raised its minimum wage for store employees from $12 to $14 in January, responding to a tight labor market and competitive pressure from rivals like Amazon and Target. The move was part of a broader effort to attract and retain talent in a competitive job market.
Walmart’s decision to lower starting pay for certain positions comes amid shifting consumer behavior. Many retailers have observed a return to pre-pandemic shopping habits, with consumers visiting physical stores more often and shopping less online, particularly for discretionary purchases. While Walmart continues to report strong online sales growth, the pace has moderated compared to the early stages of the COVID-19 pandemic.
Walmart justified the pay adjustment by aiming for consistent starting pay across various store roles, including cashiers, stockers, and online order fulfillment. The company believes that consistent starting pay fosters consistent staffing levels and improved customer service. It also provides employees with opportunities to acquire diverse skills throughout the store, regardless of their initial role.
Despite the pay change, Walmart’s shares reached a 52-week high, reflecting investor confidence in the company’s overall performance. Walmart has maintained a robust online sales growth rate, with e-commerce sales increasing by 24% year-over-year in its most recent fiscal quarter, although not at the same accelerated rate seen during the early stages of the pandemic.