Inside This Issue - Opinion
Walmart adopts new priorities
February 21st, 2011
by David Pinto, Editor
Where Walmart is the subject, neutrality doesn’t exist. Industry people either like the retailer or dislike it. Observers either admire the company or are dismissive of it. Competitors respect the retailer’s strategies or are disdainful of them.
Suppliers either fawn excessively over the company or complain about the way the retailer treats, or mistreats, them. Some consumers exhibit total loyalty to Walmart and its product offerings. Others make a show of never shopping the world’s largest retailer.
Even the current debate raging in New York City over whether the retailer should be permitted to open a store within the city’s five boroughs, absurd and counterproductive as this exercise is on the face of it — imagine holding hearings to determine whether a retailer should be allowed to open a store in a city that is woefully short of realistic shopping options, a city that, by the way, already hosts both Target and Costco — has brought out those citizens who swear by Walmart and those who swear at it.
This diverse response comes for a reason: Walmart is a company like no other, and it engenders emotions like no other. Size accounts for some of the intense feelings, positive and negative, as does the simple fact that the retailer succeeds — and often puts competitors at a disadvantage — by offering customers a price-based shopping experience like no other in the history of retailing. What Sam Walton did in his lifetime, if he did nothing else (and of course he did much else) was convince customers that nothing too bad will happen to them in a Walmart store. It is a proposition that still rings true today, nearly 19 years after Walton’s death, much to the chagrin of many competitors, some disgruntled suppliers and even some of the core customers who routinely shop Walmart.
But what makes the company particularly intriguing, even to those who delight in criticizing the way it does business, is its ability, after all these years, to remain relevant, and its willingness, even its eagerness, to change when change is called for.
It’s no secret, for example, that the last two years have not been kind to America’s largest retail company. Sales have softened. Morale has slipped. The enthusiasm that was once at the core of the retailer’s ability to manage its business has largely disappeared. The heart has been drained from the culture that once distinguished the company and separated it from its competition.
Many companies, in a comparable period of malaise, would have allowed themselves to drift, confused about what was happening and uncertain as to what to do about it. Not Walmart. Over the past year Walmart has announced more game-changing alterations than any retailer in the history of the business over a comparable period of time. These changes have combined to change the rhythm of the company by altering its priorities, rearranging its sense of what’s important, redesigning the way the retailer goes to market, and reorienting its view of its associates, its suppliers and its customers.
Magically, though Walmart’s priorities have changed, the company has not. Like it or not, it remains the most formidable retailing enterprise ever conceived, one whose impact dwarfs even those retailers — Costco comes most readily to mind — that remain more grounded and intelligent in their approach to the consumer.
More specifically, over the past several months Walmart has named a new head of its U.S. business, appointed a new chief merchant, completely reorganized its merchandising staff and realigned its operating structure and put in place a new group of senior executives throughout the company, many of whom were initially hired from other companies — that in itself a departure for the retailing community.
Additionally, the company just announced the most far-reaching program yet conceived by an American business enterprise to guide American consumers to a healthier lifestyle, specifically by promising to offer its customers packaged food that is healthier and healthy food that is more affordable than current models. The program was developed in conjunction with first lady Michelle Obama’s “Let’s Move” campaign, which has focused national attention on the issue of obesity in America while offering suggestions for improving the health of the average American.
As a package, the Walmart healthy eating initiative is remarkable, for the simple reason that it offers consumers the opportunity to take nutrition seriously by making available food options never before offered American shoppers. Whatever the benefits are for Walmart, and tangibly and intangibly they promise to be ample, the retailer must be applauded for taking this step.
Of course, Walmart being Walmart, some critics rushed to claim that the initiative is too vague, too general, too open-ended as to a specific timetable. But let’s be fair here: This is an ambitious, worthwhile project. And Walmart, alone among food retailers, has chosen to embrace it.