Washington | Retail giant Walmart, America’s largest private employer, will raise wages for 425,000 employees after a year when the pandemic has boosted sales, an initiative likely to rekindle the debate over the desired US minimum wage hike by Joe Biden.
The Walmart brand posted “record” sales in the fourth quarter but was less profitable than the markets expected, according to a statement released Thursday.
The discount giant, which employs 2.2 million people worldwide, also announced that it will increase the salaries of nearly half a million “frontline” employees in the United States to “ an average of over $ 15 an hour.
This compensation target echoes the national debate promoted by Democratic President Joe Biden who wants to generalize at the federal level a minimum hourly wage of $ 15, against $ 7.25 currently.
For now, Walmart’s minimum entry wage remains at $ 11 an hour.
The group had increased the salaries of 165,000 employees last fall.
“Changes have accelerated in 2020 in the distribution industry,” CEO Doug McMillon said during a conference call with analysts.
“The approach we’ve been trying to take for years is to create a ladder of career opportunities within the company for staff, as many of us have taken advantage of,” said Doug McMillon, 54 years old, who himself began his career as an intern at Walmart.
He said the pandemic was causing many changes, such as the increase in withdrawals of orders at the entrance of the store, which implies different inventory management and staff tasks.
The increase in wages towards this objective of 15 dollars per hour will be done “over time and according to geographical conditions, while there are parts of the country where the entry wage must be less than 15 dollars”, he added. indicated the boss of Walmart.
“Of course, we are very aware of the national debate around 15 dollars an hour and we think that it is an important objective”, he added.
“But we also think it should be paced in a way that is good for the US economy,” he observed.
Walmart’s move comes as the progressive wing of the Democratic Party urges, despite opposition from moderates, to include Joe Biden’s proposal in the upcoming $ 1.9 trillion stimulus package under discussion in Congress. raise the federal minimum wage to $ 15.
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In terms of results, Walmart recorded a 7.3% increase in its quarterly sales to 152.1 billion dollars, “a record”, boosted by a 69% growth in its online sales in the States -United.
But due to one-off charges and investments related to the pandemic, the company suffered a quarterly net loss of $ 2.1 billion.
Apart from these various exceptional items, Walmart was profitable but much less than expected since the adjusted earnings per share, benchmark in North America, stood at $ 1.39, well below the expected $ 1.51.
On Wall Street, the stock price of Walmart, a heavyweight in the flagship Dow Jones stock index, plunged almost 6% in mid-session.
The group has also indicated that it will increase investments, brought to 14 billion dollars for the current fiscal year in order to automate and improve its supply chain.
For the year, Walmart reported sales of $ 559.2 billion, up 6.7%.
Net income was $ 13.5 billion, down 9.2%. Adjusted per share, earnings stood at $ 5.48, below the $ 5.59 expected by analysts.
For the current 2021-2022 fiscal year, the brand is forecasting cautious, with “low single-digit” sales growth.
It will all depend “on the duration and intensity of the global health crisis linked to COVID-19, the timing and effectiveness of vaccines around the world, the extent and duration of the economic recovery, trends in employment and consumer confidence, ”warns Walmart.