Inside This Issue - Opinion
New leaders step to forefront
January 13th, 2014
by David Pinto, Editor
Rarely in recent memory has a new year begun with so many new faces at or near the top of the leading U.S. retailers.
Indeed, some of America’s most important retail companies begin 2014 with new leadership, in some cases leadership that has not been tested by experience at the top management levels. Some examples:
• Next month Doug McMillon takes over as the chief executive officer at Walmart, the world’s largest retailer. Replacing Mike Duke in that role, and becoming just the fifth CEO in Walmart’s 52-year history, McMillon takes the reins at a particularly crucial time in the retailer’s history, a history characterized by many more victories than losses. Now, however, the retailer is struggling to retain — or regain — its identity as America’s low-price leader, buffeted by internal indecision and a retailing community that has learned how to compete with a retailer once widely believed to be insulated from competition.
In McMillon, however, Walmart has chosen a leader as familiar with the company as anyone on the Walmart payroll. He has held a variety of jobs during his 23 years with the company, most recently running the retailer’s international operations, and has succeeded in all of them. Moreover, having grown up at Walmart, he understands the culture perhaps more acutely than his immediate predecessor — and, make no mistake, in these stressful times the Walmart culture and all it represents is the key to moving the retailer forward.
That said, it’s obvious that Doug McMillon will shortly become the most heavily scrutinized retailing executive in America.
• At about the same time Helena Foulkes will assume her duties as president of the CVS drug chain. Here again, the transition of power comes at an interesting time. While America’s foremost health care retailer routinely sets sales and earnings records, the chain drug component — CVS/pharmacy is a unit of CVS Caremark, a duality that combines a drug chain with a pharmacy benefit management component — has, according to some observers, lost its edge. Its stores, these detractors claim, are not as crisp, as inviting or as competitive as they once were. While reasons for this loss of momentum abound, the consensus in the chain drug community is that Foulkes is the ideal choice to fix things. Like Doug McMillon, she is a veteran at her company, having worked there for 21 years in a variety of positions, and having succeeded at all of them.
However, she here faces her first challenge as president of a company, or, at the least, as president of a critical component of that company. Perhaps more daunting, CVS/pharmacy is not broken, or even cracked. But it does need some adjusting, some fine-tuning, if it is to regain the luster that until recently set it apart from its competitors. Complicating the situation is the fact that Walgreens, CVS’ closest competitor, is apparently sailing smoothly into the new year, the current decade and, who knows, perhaps the next century.
So Foulkes, a hugely popular personality at CVS — even while she’s largely unknown outside the company — will, like McMillon, be closely watched, quickly tested — and cheered on, at least by her coworkers.
• Speaking of Walgreens, America’s largest drug chain made a landmark personnel change last year, bringing Alex Gourlay, most recently the head of the Boots drug chain of European legend, to Chicago as Walgreens’ senior merchandising and marketing executive. This appointment, while not quite at the level of the McMillon and Foulkes appointments, may well carry reverberations and repercussions more meaningful, and more permanent, than the other two. Gourlay is, by all measures, a superior retailing executive, having established himself as that all-too-rare combination of a hands-on leader who has enough confidence in himself and his senior staffers to allow those staffers to make their own mistakes — to a point.
That point will come, say those who know Gourlay best, when it becomes apparent that his way is a better way. That said, 2014 promises to be an exciting year at Walgreens and, judging from the initial evidence, a productive one as well.
Though those three appointments stand out, several others require some comment. Eddie Lampert has announced that he will be running both Sears and Kmart going forward, all other candidates having failed at those jobs. His initial inclination appears to be to give shoppers incentives that go beyond the actual merchandise to shop his stores. Loyalty considerations appear to be prominent here.
It must be said that little evidence exists to support any positive outlook for either Sears or Kmart — and if Lampert can rescue these sinking ships that endeavor will be remembered as one of the greatest rescue operations in the annals of mass retailing.
Safeway has a new chief executive, as does Shopko. Initially, it appears that the Safeway appointment has the greater potential for change. Kroger has appointed a new CEO, but it’s early to speculate on what that means for a retailer that is getting pretty much everything right these days.
All else is pretty much as it has been of late. But this small group of changes will certainly add some spice to the mass retailing community in 2014.