Dive Brief:

• Wal-Mart Stores Inc.’s problem with chaotic stores and empty shelves could be due to its lackluster hiring during years it expanded its number of stores, according to analysis from Reuters.

• As the retailer increased its U.S. footprint by 45% with 500 new stores in the United States and boosted sales by 50%, its U.S. workforce grew just 8%, Reuters reports, leaving space per employee to expand 34%.

• Wal-Mart spokesman Kory Lundberg told Reuters that the decrease in number of employees per square foot over the past 10 years was due to increased use of technology and more mechanized in-store operations, like more shelf-ready packaging, motorized carts that retrieve shopping carts, and more self-service checkouts.

Dive Insight:

Wal-Mart Stores is facing market pressure to increase its minimum hourly wages, and that will cost the company a billion dollars. That has investors worried that it won’t be able to provide growth in an already saturated retail environment in the U.S. 

But the retailer may also have to hire more of those workers if it hopes to improve the performance of its physical stores. It’s already made moves to improve training and is bringing workers back to greet customers and be more readily available to provide customer service on the store floor.

The company, which doesn’t provide its own headcount of its workforce, told Reuters that the vast increase in store footage per employee is the result of more mechanized processes that don’t require as many workers.

But the retailer has also opted to do with fewer employees by, for example, locking in workers overnight rather than have managers there to supervise in the past, experts have told Retail Dive.

“In the last seven to 10 years, Wal-Mart stores in the U.S. got increasingly sloppy and poorly presented and suffered a handful of scandals, including locking the maintenance staff and padlocking the doors,” says Columbia University business school retail studies professor Mark Cohen. “From day one they’ve been fixated on low cost, so rather than have supervision, they lock the doors—pretty stupid. Now the latest group of leaders are trying to clean up the stores, but they have to crack the culture of low cost at any price. It takes enormous amount of elbow grease [to improve stores].”