Angles many to better Wal- Marts
Execs size up in- store changes aimed at lifting U. S. sales
Tasked with boosting WalMart’s sales and gaining favor with customers, Greg Foran is tweaking everything from employee scheduling to how restrooms are cleaned.
Foran, who has been CEO of Wal- Mart’s Stores Inc.’ s U. S. division since Aug. 9, 2014, said Thursday that for all the improvements and changes implemented in the past eight months, his to- do list isn’t getting any shorter.
“One of the things I love about this job is that at the end of each day, no matter how long you’ve worked, your list of things to do is never, ever reduced. It just increases,” Foran said during a media conference held during the company’s shareholders week.
Chief Operating Officer Judith McKenna said Thursday that the retailer wants stores that its executives would be proud of showing off to their families by the Christmas- shopping season. Earlier in the week, she told about 4,000 U. S. workers that stores should be “clean, fast and friendly.”
McKenna said there is no easy way to measure customer perception of a store’s cleanliness or the friendliness of employees, but such perception is a priority. WalMart is tweaking its in- store cleaning practices.
Wal- Mart’s plan to reintroduce department managers into stores will begin full implementation in about a week. Between 7,000 and 8,000 of those positions are being added, and about 450 stores have already seen the addition of department managers.
Foran noted that tweaks also are being made to store layouts, how merchandise flows through the stores, the
way in which merchandise is displayed and the technology made available to employees. In talks with employees, Foran stressed the importance of the “10- foot rule,” which asks workers to engage with customers when within 10 feet or less.
All of the changes are designed to improve sales for Wal- Mart U. S. and the company as a whole.
Domestic sales account for about 60 percent of the retailer’s $ 483 billion in worldwide revenue. Profit was down for the entire company by about 7 percent in the first quarter, and getting better performance in the U. S. is a critical part of the company’s growth.
U. S. stores did see incremental improvements in traffic and and same- store growth. Revenue was $ 2.4 billion, a 3.5 percent increase from the same quarter a year ago. Foran described the U. S. division’s financial performance in the first quarter as “reasonable.”
Wal- Mart also has invested $ 1 billion in wage increases for employees and plans up to $ 1.5 billion in e- commerce investments this year.
Stephens Inc. retail analyst John R. Lawrence said that no single change will make the difference for WalMart when it comes to improving sales.
“It’s not any one of these particular strategies,” Lawrence said. “It’s the total of them all put together — what sort of changes will they need to make to see consistent improvement.”
Part of the challenge for Foran and the U. S. division in the quest for better stores, more employee engagement and greater sales is the sheer number of stores. Wal- Mart operates between 4,500 and 5,000 stores as part of its domestic operation. A recently opened supercenter in Springdale, for example, is 185,000 square feet with a mix of full- and part- time employees.
For all the improvements executives would like to see, rolling them out nationwide is a time- consuming process. Changes to scheduling and training will take nearly a year from pilot programs to full implementation.
McKenna said she has sometimes underestimated “how much it takes to move the needle on 4,500 stores all at the same time when you do something.” Both executives have spoken in the past about the importance of simplification in their approach.
“I frequently say that when we’ve got an idea that we need to get out there, we have to keep it very simple,” McKenna said. “It doesn’t mean we can’t do difficult things; we just have to find the ways to do them simply. That’s probably the greatest piece of learning I’ve had.”