Walmart Defends Strategic Decisions

Author: 8th and Walton

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“These are exciting times in retail given the pace and magnitude of change. We have strengths and assets to build on and are making progress to position the company for the future,” said Doug McMillon president and CEO, Wal-Mart Stores, Inc.  “Our investments in our people, our stores and our digital capabilities and e-commerce business are the right ones.”

McMillon is not the only one defending Walmart’s decision to invest in associates and in technology. “McMillon is right,” said Jim Cramer, the host of CNBC’s Mad Money, who interviewed McMillon on his program.  Cramer acknowledged that many investors had responded emotionally to Walmart’s earnings announcements. “Those people don’t really get what was going on here. McMillon wasn’t so much cutting earnings as he was laying out a whole new strategy.”

Walmart’s corporate blog addressed the investor response, too. “The reaction by the market – while not what we’d hoped – was not entirely surprising. We’re making significant investments in our people and technology. These investments are critical to our current and future success as a company. Simply put, it’s the right thing to do. ”

For suppliers, some of the changes in the next few years may be painful. Cameron Smith was quoted in news reports as saying, “The ground is shaking here.” Walmart is asking a lot of suppliers, and while they are saying that the future will be better for those who come along for the ride, some suppliers may not be able to keep up.

“At its core,” Walmart announced, “our growth plan has one goal: Walmart will be the first to deliver a seamless shopping experience at scale. No matter how you choose to shop with us, it will be fast and easy.”

Store-level execution is improving across the nation as a result of Walmart’s investments in associates, and the investment in serving the omnichannel shopper better are helping in the competition with Amazon. Being a smarter supplier can mean moving your business in the same directions.

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