Walmart plans to boost wages, hire more and close underperforming stores as it looks to invigorate sales by targeting an elusive core demographic of shoppers willing to pay more for its food and non-food products.
The world’s largest retailer is seeking to entice shoppers struggling with high gas prices and a sluggish economy with a $1 billion in spending on investments.
“Everything we do we want to do to help our associates make better jobs for themselves, and we want to reward them and help them be great not just for their customers but for the communities where they live,” Chief Executive Doug McMillon said on a conference call with analysts.
For consumers who had been cutting back on luxuries, higher wages will be a big boon, helping to swing the retail story of just-spent money over the coming year to the positive, the company’s fourth-quarter results showed.
Retailers have worked hard to gain customers in recent years by cutting prices and offering limited-time offers for specific products. Growth has been stunted by stubbornly high unemployment and weak wage growth.
Walmart said on Wednesday that it plans to increase hourly wages by 1 percent and by a percentage point to 2 percent to 2.13 percent, while also adding 1,000-1,000 jobs at more than 6,000 U.S. stores, mostly at the company’s contract business.
Shares of the company were up more than 2 percent in after-hours trading after jumping as much as 5.2 percent in New York.