Monday, July 26, 2010

Walmart is Back!

At Walmart Old School is the New School

Back to the future, déjà vu, whatever you call it, Walmart this week removed any lingering doubts about the future direction of the U.S. stores division under the leadership of new president and CEO Bill Simon. 

The company is keen to restore sales momentum and frayed relationships with its supplier community, and to address those goals a group of senior level executives reportedly met with the entire merchandising team in the Walmart home office auditorium this week. They spelled out priorities that, according to notes from an anonymous source widely circulated among suppliers after the meeting, sounded like the company's traditional approach to business relationships and operational strategies.

Simon, Walmart president and CEO Mike Duke, former president and CEO Lee Scott and Walmart International president and CEO Doug McMillon participated in a panel discussion where the key takeaway was that autonomy has been returned to merchants to run their business. In addition, buyers need to listen to and collaborate with suppliers, have fun, take thoughtful risks and recognize there is power in assortments.
The messaging is a departure from the leadership of former stores division president and CEO Eduardo Castro-Wright and former chief merchant John Fleming. Castro-Wright in late June was reassigned to lead Walmart's global sourcing and business, and Fleming left the company a few days after Simon was promoted from his COO role. Castro-Wright and Fleming took the stores division in a new direction by reducing product assortments and eliminating promotional displays in the name of reducing clutter to enhance the customers' shopping experience. 

Some of the strategies, collectively referred to as Project Impact, were effective. Improved labor scheduling that reduced checkout lines, and supply chain efforts that reduced inventories worked well. But sales suffered as Walmart stores lost promotional intensity and suppliers who had grown accustomed to the collaborative approach of prior regimes grew increasingly alienated by the command and control style of Castro-Wright and Fleming. 

Mike Duke reportedly told the buyers, "You are officially unleashed to run your business."

That's welcome news to the company's suppliers as evidenced by the pace at which word of the meeting and those anonymous notes spread. 

Reprinted from article on

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