Walmart has promised to raise wages for hundreds of thousands of its United States-based workers.
In a note addressed to employees, Walmart U.S. president and CEO John Furner announced that the Bentonville, Ark.-based company would increase pay for store associates in digital and stocking roles. The hike will affect 425,000 people out of its nearly 1.5 million U.S. employees, with starting rates moving to $13 through $19 per hour, based on the outpost’s location and market.
“We saw major changes to customer behavior last year we believe will be lasting, and we have to continue working to stay in-stock, deliver items on time and provide the best omni experience possible,” Furner wrote. “This is an investment in our people, at the same time we make new investments in our supply chain, automation and technology.”
According to Walmart, the latest bump will bring its average hourly wage to above $15 per hour. Its minimum hourly starting pay, however, remains at $11.
In recent years, some of the big-box chain’s largest competitors have introduced a $15 an hour minimum wage: Amazon, Target and Costco are among the boldface retailers that pay their workers $15 per hour — more than double the federal minimum wage of $7.25 an hour, which has remained at that rate since 2009. In October, Walmart improved wages for about 165,000 hourly employees — or roughly 11% of its U.S. workforce — as part of the rollout of a new operating model in its Supercenter stores.
Walmart’s announcement also came the same day it released its fourth-quarter financial results, with revenues advancing 7.3% to $152.1 billion, surpassing analysts’ expectations, and comps climbing 8.6% in the period ended Jan. 29. Profits, however, dropped below forecasts; it logged adjusted earnings of $1.39 per share, compared with market watchers’ bets of $1.51.
Over the past several months, the chain has benefited from pandemic-induced trends, such as increased non-discretionary buying and the shift to digital channels. However, the health crisis has also added to its cost of doing business; in the fourth quarter, Walmart reported that it saw $1.1 billion in COVID-19-related incremental expenses.
Still, president and CEO Doug McMillon expressed optimism in the year ahead: “We completed a strong year and a strong Q4 thanks to our amazing associates. They stepped up to serve our customers and members exceptionally well during a busy holiday period in the midst of a pandemic. Change in retail accelerated in 2020. The capabilities we’ve built in previous years put us ahead, and we’re going to stay ahead.”