Wal-Mart assessed $4.83 million in back wages, damages
Bentonville, Ark. — The U.S. Department of Labor’s Wage and Hour Division has ordered Wal-Mart Stores Inc. to pay more than $4.8 million in back wages and damages to some 4,500 employees nationwide.
The assessment follows a departmental investigation of the retailer that uncovered violations of the federal Fair Labor Standards Act’s overtime provisions.
Wal-Mart has been assessed another $463,815 in civil money penalties.
The violations affected current and former vision center managers and asset protection coordinators at Wal-Mart Discount Stores, Wal-Mart Supercenters, Neighborhood Markets and Sam’s Club warehouses. Wal-Mart did not pay overtime because it considered the employees to be exempt; however, the investigation revealed that the staffers were non-exempt and therefore due overtime pay for all hours worked past 40 per week.
"Misclassification of employees as exempt from FLSA coverage is a costly problem with adverse consequences for employees and corporations," said Secretary of Labor Hilda L. Solis. "Let this be a signal to other companies that when violations are found, the Labor Department will take appropriate action to ensure that workers receive the wages they have earned."
Under the terms of the settlement, Wal-Mart has agreed to pay all back wages determined to be due as well as an equal sum in liquidated damages to the employees.
The civil penalty of nearly $500,000 stems from the repeat nature of the violations.
Wal-Mart corrected its classification practices for these workers in 2007, and negotiation over the back pay issues has been ongoing since that time.
ShopperTrak: Expect more sales and shoppers this Mother’s Day
Chicago — A report released Tuesday by ShopperTrak found that consumers are expected to shop and buy more in the week leading up to Mother’s Day than they did last year.
According to the report, national retail sales, when compared to the same period last year, will rise 6% in the week leading up to Mother’s Day, and foot traffic will increase 3.7%.
"As the economy improves, consumers are recovering the confidence they need to splurge on Mom this year," said ShopperTrak founder Bill Martin. "Retailers can expect a busy week leading up to Mother’s Day."
ShopperTrak’s 6% sales increase forecast follows 27 months of consecutive year-over-year U.S. GAFO retail sales growth. Mother’s Day sales and traffic are historically a bright shopping spot in the retail calendar, lagging only behind the November – December holiday season, the back-to-school season and Easter.
Mother’s Day 2012 falls one week later on the calendar than last year, which may affect sales positively, according to ShopperTrak. The extra time between Mother’s Day and Easter gives consumers a chance to replenish their bank accounts after Easter shopping. The warmer weather may also entice more people to get out of the house and hit the stores.
Retailers saw decreases in year-over-year foot traffic during the final months of 2011, but are beginning to see signs of improvement. ShopperTrak reports year-over-year changes in foot traffic were flat during the first quarter of 2012, and slightly increased as the second quarter began. Barring excessive increases in gasoline prices and increased economic uncertainty, ShopperTrak expects foot traffic to continue rising through the back-to-school shopping season later this summer.
"Retailers can expect more shoppers in the weeks leading up to Mother’s Day," added Martin. "Those who monitor foot traffic, and adjust their store management practices accordingly, will be the most successful this year."
Survey: Retail CFOs more optimistic about industry and economy
Norwalk, Conn. — The CFOs of U.S. middle-market retailers are more optimistic about the current state of their own industry and the U.S. economy, although they are significantly more pessimistic about the global economy, according to the latest GE Capital U.S. Mid-Market Survey.
Fifty-one percent of retail CFOs say their industry will grow over the next 12 months — an increase of 25% over the previous wave of this survey, which was conducted in the third quarter of 2011.
In fact, retail CFOs are the second-most optimistic of those surveyed, just behind executives of metals and mining companies (54%).
“Consumers are slowly returning to the market and we’re seeing this shift reflected in an increase in CFO optimism about the current state of the U.S. economy and the outlook for the retail industry,” said Jim Hogan, senior managing director, GE Capital, Corporate Retail Finance. “Although still cautious, we are seeing an increase in retailers who are moving out of survival mode and seeking finance to reinvest in and grow their businesses.”
Not surprisingly, retail CFOs believe labor costs and energy costs, including oil and gas, will have the most significant impact on their business this year. At the same time, they’re investing in their businesses; retail CFOs expect to spend more on equipment and general capital expenditures this year.
Additional retail industry survey findings include:
Revenues: Seventy-four percent expect their company’s revenues to increase this year — a 16% increase over the previous wave of this survey, which was conducted in third quarter 2011.
Profitability: Thirty-eight percent predict profit margins will increase this year, up from 30%, while 44% expect profit margins will stay about the same this year.
Capital expenditures: Fifty-four percent said their capital expenditures will be about the same this year as last year — a 16 percentage point increase from third-quarter 2011.
Pricing: Fewer retail CFOs plan to increase the price of their products or services this year (48% compared to 58% in the third quarter of 2011).
Growth areas: Seventy-two percent of retailers expect the discount category to be the biggest area of consumer spending this year, unchanged from the previous survey. Twelve percent of retail CFOs chose the aspirational category (up from 6%) and the luxury category (down from 20%) to be the biggest area of consumer spending.
Inventory: Sixty-two percent expect inventory levels to remain the same this year, while 26% said they would increase. The average expected inventory increase through the remainder of the year is 10%, unchanged from third-quarter 2011.
Hiring: Seventy-two percent expect to hire in the next 12 months and anticipate increasing their workforce by 4%.