Inside This Issue - Opinion
Needs of core customers guide Walmart evolution
October 18th, 2010
After a period of experimentation at Walmart that saw the nation’s top discounter recast its business in a questionable attempt to make itself more like the No. 2 player, the company has renewed its commitment to the principles that made it great.
Speaking at the retailer’s annual conference for members of the investment community earlier this month, chief executive officer Mike Duke and other members of the senior management team emphasized the importance of focusing on everyday low prices, the fulcrum that Sam Walton, the company’s legendary founder, and his successors used to make Walmart the dominant retailer in the United States and the largest in the world.
That orientation is intended to undo self-inflicted damage to the company’s U.S. business caused primarily by a misguided drive to reduce the number of SKUs in the stores.
Under the leadership of Bill Simon, who was chosen as head of Walmart’s U.S. division just three and a half months ago, the retailer is moving expeditiously to return many deleted products to the shelves and burnish its image as the best option consumers have for one-stop-shopping.
Simon noted that, although the initiative is still a work in progress, it is already having a positive impact. The project is vital to Walmart’s bid to drive comparable-store sales growth in this country, something that has been hard to come by in recent quarters.
Duke said that the changes are a response to the needs of Walmart’s core customer and are particularly relevant at a time when economic conditions remain challenging. Staying close to the consumer has always served the retailer well, he noted, adding that Walmart is confident it is better able to understand her than ever before.
The company’s willingness to listen, try new concepts and change course when necessary is a source of strength.
“Someone asked me why Walmart always goes from ditch to ditch,” said Duke, referring to the company’s shifts in direction. “My answer was, ‘So we know the width of the road.’ If you know how wide the road is then you can get in the middle of it and drive down the road at a much faster speed.”
The strategic plans outlined by management give every reason to think that’s where Walmart — the international, e-commerce and Sam’s Club divisions as well as its U.S. business — is headed.