Inside This Issue - Opinion
Eventful month on retail scene
July 9th, 2012
by David Pinto, Editor
June of 2012 was a month crammed with notable, some would say unforgettable, events, which combined to reassert the viability and sometimes unpredictable nature of mass market retailing in America.
The month began with Walmart’s annual shareholders meeting at the Bud Walton arena in Fayetteville, Ark. As always, the meeting was heavily attended by Walmart associates from around the globe, supplemented by the usual assortment of analysts, journalists, retirees, suppliers and hangers-on, many drawn to the event by the promise of scandal, recriminations and mea culpas. Those who expected fireworks, however, were disappointed.
The meeting was, in many ways, a signature Walmart event, combining the appropriate respect for the founder on the occasion of the retailer’s 50th anniversary with the usual celebrity appearances, executive speeches and self-congratulatory messages. Added this year was a reiteration of Walmart’s core values of honesty, candor and ethical conduct. As an event, then, it was impressive primarily because it was a Walmart event — and, as such, in a class by itself.
It has become fashionable of late to disparage Walmart and all it has accomplished over the past half-century. That’s too bad. If the retailer occasionally stumbles and often demonstrates that it is its own worst enemy, it remains, nonetheless, a symbol of America and a vital part of the American culture. Americans shop, work for, sell to and invest in Walmart as they have never done before, and its influence stretches across the globe. Those who love to denigrate this American institution ignore the fact that it is an American institution — and that it is today integral to the American experience. Anyone doubting its impact need only attend a Walmart shareholders meeting to get the full meaning of what this company represents in 21st century America.
The month ended with the most significant event mass retailing has seen in a decade: The merging of Walgreens and Alliance Boots. Here again, those questioning the wisdom or strategic importance of this alliance demonstrate that their mass retail education needs refreshing. This alliance is less about the advent of global chain drug retailing than it is about the merger of two companies with complementary strengths. Foremost among Alliance Boots’ many advantages is its world-class drug wholesaling capability, one that impacts virtually every market in the world outside the United States. Additionally, the U.K.-based company possesses a vibrant line of generic drugs, which it will ultimately provide to Walgreens, as well as a dominant line of house brands, among them the globally recognized No7 beauty care assortment, which will soon be sold at Walgreens drug stores across America.
But perhaps of even greater significance than the services Alliance Boots is capable of providing — and, by way of trade, the opportunity for Alliance Boots to enter, in some form, the United States — is the strength of the management of the two companies. It needs to be said clearly: No retailer anywhere can top the experience, leadership, ability and strategic excellence the managers of these two companies will bring to the retail marketplace when the two companies are truly integrated.
Just to touch the surface, Greg Wasson has proven, in a very short time period, his ability to lead, to strategize, to both chart a course and change direction. He’s the leader that Walgreens has desperately needed since Dan Jorndt retired some 10 years ago. With the Alliance Boots merger he has solidified his position atop the chain drug industry in America.
As for Stefano Pessina, he is clearly in a class by himself as a visionary who has succeeded by transforming, through bold and decisive action, that vision into reality. Alliance Boots is today the world’s dominant chain drug retailer and wholesaler — if you remove the United States from that world. Now, thanks to the Walgreens alliance, it is no longer necessary to exclude the United States. So it can now accurately be stated that Pessina, in partnership with Wasson, is in the process of creating the world’s premier drug retailing and wholesaling brand.
With all the talk of Wasson and Pessina, it becomes easy to forget the wealth of management talent these two retailers offer in support of their CEOs. In today’s retailing environment, no company can survive simply with strong leadership. Top-level executives must be complemented by strong, decisive managers who both support its leaders and question them when questioning them becomes necessary. Both Walgreens and Alliance Boots offer an abundance of world-class managers throughout their organizations, leaders who can both follow and lead, executives who rely on direction yet are capable of following their own direction.
So it needs to be said yet again: All arguments to the contrary, the Walgreens–Alliance Boots merger will go down as a seminal event in chain drug retailing in America.