The recent news out of Bentonville, Ark., to the effect that, come February, Doug McMillon will be replacing Mike Duke as chief executive officer at Walmart did not come as a surprise to industry people.

Bentonville, Ark., Doug McMillon, Mike Duke, Walmart, Walmart U.S., Bill Simon, Samís Club, Sam Walton, David Glass, Lee Scott, Black Friday,

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Inside This Issue - Opinion

The logical choice at Walmart

December 9th, 2013
by David Pinto, Editor

The recent news out of Bentonville, Ark., to the effect that, come February, Doug McMillon will be replacing Mike Duke as chief executive officer at Walmart did not come as a surprise to industry people.

For some time now, the feeling within the mass retailing community was that Duke, who has held the CEO post since February 2009, would soon be stepping down — and that either McMillon or Walmart U.S. president Bill Simon would replace him. McMillon, the traditional Walmart executive, was deemed the favorite.

From many angles, McMillon is the logical candidate to become the fourth chief executive in Walmart’s 51-year history. He comes to his new job with a varied and impressive Walmart resume, having run both the Sam’s Club division and the international operations at this global retailer, and having served in many capacities domestically, all with impressive degrees of success.

By contrast, Simon is a relative newcomer to the world’s largest retailer, having joined Walmart just seven years ago after a varied business career that was notably lacking in retail experience. Still, his contributions are numerous, ranging from the unveiling of the retailer’s $4 prescription drug program to the recently announced initiative to encourage suppliers to produce more goods in the United States.

Despite his accomplishments, however, most observers believe that Walmart today lacks the magic at store level that characterized the retailer during its halcyon days under the leadership of Sam Walton, David Glass and Lee Scott. Moreover, the innovation and excitement that set the company apart through its growth years has been, say many industry people, most notable, in recent years, for its absence.

Many of those assessments can be made with equal validity about Mike Duke, an executive who did not always succeed in rousing his associates to superior performance or produce the abundance of legendary merchants that once marked the retailer. Walmart today can be accurately described as a very good retailer. It is no longer, however, the retailing standard — not in the United States at any rate. That title can be more rightly claimed by at least a half-dozen competitors, in both the grocery and general merchandise arenas.

About McMillon, he comes to his new job with impressive credentials — and an even more impressive legacy. Within Walmart, he’s universally liked and respected. Though a diligent worker in the Walmart tradition, he’s not afraid to have fun, a commodity sometimes found lacking in Bentonville in recent years. Equally important, he’s long been lauded for producing exciting retail stores, as any tour of Walmart’s far-flung retail presence throughout the world will attest. At a time when Walmart’s U.S. organization has sometimes been slow to produce exciting new prototypes, its global counterpart has rushed to market with a dozen different store ­variations.

And make no mistake: Walmart needs some exciting new formats in the United States, a market that, while remaining Walmart’s most important, has approached middle age somewhat prematurely. Many of its stores today are old or neglected — or both.

Equally significant, the company has not aged well in many ways. It still fights many of the battles that characterized it a decade or two ago — and it continues to lose many of them. The most recent example is the aura that surrounded the retailer’s Black Friday performance, one remembered not for customer counts, sales or promotional excitement but rather for the violence that sometimes characterized the crowds that shopped Walmart throughout the weekend. As unsettling as the unruliness of customers was the press’ eagerness to report on that unruliness. It became, over that weekend, the lead story in many stories about holiday traffic.

Events like this need fixing — and McMillon appears, initially at least, the candidate most qualified to fix them.

In short, the feeling here is that McMillon’s appointment will usher in a bright new day at Walmart, one that is somewhat overdue and one that will benefit not only the company but the entire retailing community. Truth is, if Walmart’s U.S. stores sometimes lack the excitement and energy they once commanded, so too do their competitors’ stores, stores that, challenged by the Walmart of a different generation, usually rose admirably to that challenge. The feeling here is that they will shortly get the opportunity to do so once again.