The following is the complete text of the remarks Prepared for Mike Duke President and CEO, Walmart for the2010 Shareholders Meeting. Although Mr Duke does not speak directly to Private Brands his ambitious vision for the Walmart of the future, pricing transparency and his company’s social consciousness should be read by retailers everywhere.
“Next Generation Walmart”
Friday, June 4, 2010
“If we work together … we’ll lower the cost of living for everyone. We’ll give the world an opportunity to see what it’s like to save and have a better life.”
Sam Walton said those words almost 20 years ago. Isn’t it amazing that he could see that far ahead? At that time, we weren’t even in all 50 states.
But Sam understood the power of our model. He understood the strength of our mission. And he understood people and their common aspirations everywhere. Whether a family is sitting around a kitchen table in Guangdong, Guatemala, or my home state of Georgia, they all want a better life.
The question for each of us almost a generation later: Can we live up to Sam Walton’s global vision? Can we give people around the world the opportunity to save money and live better?
The progress we’ve made around the world is incredible. I think even Sam would be surprised by how far and how fast we’ve come.
Over the last 20 years, we’ve gone from 1,500 stores and 275,000 associates in the U.S. to more than 8,000 stores and clubs and over 2 million associates in 15 countries around the world.
And when it comes to sales growth, I’m amazed by what I’ve seen just since I started at Walmart in 1995. Our international business is larger today than our entire business was then.
Clearly we recognize there’s a business opportunity in the world. We also recognize that the world is changing fast in big, disruptive, complex ways.
So let’s look ahead to 20 years from now.
We will live in a vastly different world. There will be well over a billion more people on the planet. And hundreds of millions of people will rise into the middle class. Energy will cost more. The demand for food will double. Our global economy will be even more connected. Technology will drive all sorts of changes, especially in our industry. And our competitors will be even more nimble and innovative.
These are big challenges. But they’re also big opportunities for those who can get out in front of change. Just imagine the role that you and your company can play in the world over the next 20 years.
Think about sourcing hundreds of billions of dollars in new product and what that will do to help create vibrant economies and communities.
Think about giving everyone with a mobile device the platform and information to buy the exact product they want at the absolute best price anywhere in the world.
Think about helping not 200 million customers a week, but what about helping a billion customers a week save money and live better.
These are not just aspirational goals. These are achievable goals. We are poised to live up to Sam Walton’s global vision and build the Next Generation Walmart.
But we need to focus on certain areas to deliver on that vision for our customers, our shareholders, our associates and our world.
I see four priorities. First, we must become a truly global company. Second, we must understand the business challenges that retailers will face and solve them. Third, we need to play an even bigger leadership role on social issues that matter to our customers. And most important, we must do all of this while keeping our culture strong everywhere.
When people ask me what I focus on everyday, my answer is people and sales.
All you have to do is walk in my office, and there’s a big folder with the details of our business. I love the details of retail. And when Eduardo or Doug or Brian walk into my office, and I reach for that folder, they know we’ll talk about the details of their business.
I also like MBWA — “Management by Walking Around.” Just the other day, I was doing that and stopped in on a meeting between a merchant and a supplier. I just wanted to listen and learn about their business. Supplier relationships have been essential to our success in the past, and that’s not going to change in the future.
Now my next answer to the question of what I focus on everyday goes beyond execution. It’s about looking out to that next generation, like Sam Walton did, and thinking about our global opportunity.
So let’s talk about how we can become a global company.
I’m so proud of Walmart’s performance. Last year, with $405 billion in sales worldwide, you made us number one on the Fortune 500. And for the first time in our history, the sales you delivered outside the U.S. topped $100 billion.
Our international business is strong and only becoming an even bigger and more important part of our company. More than 60 percent of our new square footage built last quarter was in Walmart International.
I’m also pleased with the progress at leveraging expenses and reenergizing the productivity loop. Every division and the Home Office leveraged expenses last quarter.
Of course there are areas where we as a business really need to improve.
In Walmart U.S., we need to improve our comp store sales. At Sam’s Club, we need to continue to drive product quality and greater membership penetration. And in International, we need to continue to set an aggressive pace of growth and have a constant emphasis on returns.
Our results demonstrate the underlying strength of our business and our strategies, once again, of growth leverage returns. The bottom line is: I’m optimistic about our business, and you should be too.
As proud as we are of our recent performance, future success is never guaranteed. Leadership is not an entitlement, especially in our business.
So as we look at being a global company, the first thing is we have to serve customers as a local store. In the future, we’re still going to build large stores, but we’ll also build a lot of smaller stores and have many more points of distribution.
We’ll also need to hire and train a lot of new associates to serve and understand customers. Just over the next five years, we’ll create 500,000 jobs around the world.
We need to learn to recruit the best talent and identify the best talent in our ranks. Then we need to develop leaders and help them become global citizens. And that includes making a special effort to help develop women everywhere in our company and at all levels of our company.
Being a truly global company will also mean learning how to share best practices around the world and learning how to leverage our global supply chain. We have a tremendous opportunity in sourcing to save our customers billions.
Now we must also meet new business challenges.
Retail will soon enter an era of price transparency. And what kind of retailer wins in a time of price transparency? You got it — the price leader.
But we need to really churn the productivity loop and deliver on our Everyday Low Price business model everywhere. Walmart must widen the gap here. We will win on price leadership, and we will win big.
Being a technology leader will also be absolutely essential. We’ve made significant investments in technology to operate more efficiently and deliver even greater value to our customers.
But there’s another aspect of technology that goes to the heart of the customer experience, and that’s e-commerce.
We need an even deeper understanding of the role of mobile technology throughout the world, including developing countries. We have to develop the right channels for customers to shop when they want, how they want, and where they want. Quite frankly, some of our competitors are ahead of us here. So let me be clear: Building the best website will be just as important as getting our store formats right.
Building the Next Generation Walmart means being a truly global company and solving the business challenges of the future. But we can never forget: There’s another part of our mission, and that’s to help people live better.
One of my favorite quotes is … “To whom much is given, much more is expected.” If we want the freedom to pursue our business goals around the world, we must play an even bigger leadership role in helping solve social challenges.
Over the last few years, we’ve built a model for making a big difference on big issues. Just in the last 18 months:
- We committed to eliminating 20 million metric tons of greenhouse gas emissions from our global supply chain by the end of 2015.
- We announced a Sustainable Product Index to give manufacturers, merchants, customers and other retailers the tools to make more sustainable decisions.
- We’ve launched local agricultural programs in Mexico and India and a Direct Farm Program that will involve as many as 1 million farmers in China.
- And we pledged $2 billion in cash and in-kind contributions to help end hunger in America.
These aren’t the actions of a company new to making a difference in the world. We are well into this journey now. And we know that being a good company is good for our business.
At the height of this recession, we promised we would broaden and accelerate our commitment to sustainability. Today sustainability is sustainable at Walmart.
The outside world recognizes our leadership and our ability to get things done. No one can doubt our sincerity. No one can question our credibility. But as Sam Walton knew, leadership leads to higher expectations.
And you know what? That’s fine by me. I appreciate that the world now has higher expectations of our company. So we must raise the bar. We must continue to meet the social obligations and expectations ahead. Walmart will never look back.
We are poised to be a global company and to meet the world’s business and social challenges. But that is not enough. To achieve our desired results, we must keep our culture strong everywhere.
You have to care about your work and about people. You have to trust each other and be trusted by those you serve. You have to constantly look for ways to change and improve. I know I’m not alone in this room with these beliefs. I know I’m not alone in any of the more than 8,000 stores and clubs I might visit any day of the week.
Everywhere I go in the world I see and meet associates with the same passion that I have for our culture and for serving customers.
As Rob shared, our culture is who we are. It isn’t just words written on a wall at the Home Office, or stapled to the bulletin board in the backroom of a store. It makes us special. It sets us apart from the competition. And it appeals to people everywhere. The culture of our company can work among the cultures of every country.
So wherever we go, and whatever changes we may make, we must keep our culture strong. I believe, I truly believe, the retailer that respects individuals, that puts customers first, that strives for excellence, that is trusted — that retailer will win the future.
20 years from now, some of you will be back in this arena at our annual shareholders meeting. Many will have bigger roles and increased responsibilities. One of you might even be standing where I am, looking out from this stage with immense pride.
I want all of you to be able to say that at this moment Walmart committed to being a truly global company and began building the Next Generation Walmart.
We committed to overcoming the global challenges facing our business. We committed to an even bigger leadership role in helping solve the global challenges facing society. And we committed to keeping our culture strong always and everywhere.
This is our company’s opportunity. As Walmart Associates, this is your opportunity. And as Sam Walton said, it’s the world’s opportunity “to see what it’s like to save and have a better life.”
Thank you for the honor to serve you and to have you by my side.