Wal Mart

06/04/2011

Wal-Mart U.S. Chief Aims for a Turnar…

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BOSSTALK

MARCH 21, 2011

With Sales Flabby, Wal-Mart Turns to Its Core
By MIGU EL BU STIL L O

After attempting to appeal to a wider variety of shoppers backfired, discount giant Wal-Mart Stores Inc. now is mired in its worst U.S. sales slump ever. But William Simon, the former Navy officer put in charge of the flagging U.S. division last June, says he is confident that the lumbering giant canreverse its fortunes after seven consecutive quarters of domestic sales declines at stores open at least a year. Part of his strategy includes returning to the "Every Day Low Prices" formula Wal-Mart popularized, after the company in recent years veered away from offering low prices across the board and instead discounted some items while raising prices on others.

Marc F. Henning for The WallStreet Journal

Mr. Simon says he hopes this will win back some of Wal-Mart's core customers—households earning $30,000 to $70,000 a year—which the company has been losing to upstart dollar-store chains. Mr. Simon also hopes to restore Wal-Mart's reputation as a one-stop-shopping destination: The company spent billions remodeling its U.S. stores over the past four years, but some customers werealienated by the resulting supercenters' leaner selections. Mr. Simon stresses he isn't merely returning Wal-Mart to the past, however. His comeback strategy hinges on opening smaller stores to penetrate the big urban markets that long have eluded Wal-Mart amid opposition from unions and their allies. At Wal-Mart's headquarters in Bentonville, Ark., Mr. Simon, 51 years old, recently discussed hisplans.

'I think w e tried to stretch the brand a little too far,' says William Simon, Wal-Mart's chief for the U.S.

Excerpts
Reuters

Wal-Mart has faced opposition in New York, including at this protest last month at City Hall.

WSJ: Y ou inherited a situation at Wal-Mart in which the company lost its way a bit. Can you just go back to what WalMart did well?

Mr. Simon: I try to avoidthe word "back," because back doesn't exist; history is gone. You have to take what worked for Sam [Walton], what's worked recently, and where you think the business is going and build it all together. WSJ: Did Wal-Mart lose sight of its core customer? Mr. Simon: I think we tried to stretch the brand a little too far.
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06/04/2011 Wal-Mart U.S. Chief Aimsfor a Turnar… WSJ: Can you grow again just by focusing on your core customers? After all, Wal-Mart's revenue growth was stagnating in the U.S. five years ago, which is why Wal-Mart began changing its formula in the first place.

Mr. Simon: Where we weren't five years ago is a place where we were willing to put small stores into urban areas. What we have to do is deliver the brand to customers inthose markets, and the brand can come in a small format. "Every Day Low Prices" can happen in 15,000 square feet. WSJ: Wal-Mart has had political trouble getting into New Y ork City with big stores and it looks like that remains a problem. Are you prepared to open smaller stores in New York, which do not require the same level of approval from city officials, regardless of the political climate?Mr. Simon: If we can open stores in New Y ork, we're going to open them, because the customers need us. WSJ: How are your supercenters going to compete against the onslaught of small discount stores in the U.S.? Mr. Simon: The biggest issue with supercenters has not been small [discount] stores. It has been our inability to deliver every day low prices and a large assortment. If we can deliver...