• Wal-Mart CEO Lee Scott told analysts at the close of a two-day meeting in Bentonville, Arkansas, yesterday that he was optimistic about the prospects for end-of-year holiday sales.
"I feel good about Christmas," Scott said. "We are realistic about the environment we are in, but we are also optimistic. Our business is very healthy."
• Mike Duke, Wal-Mart’s vice chairman, defended to investment analysts yesterday the company’s decision to spend more than $800 million to acquire the 49 percent of Japanese retailer Seiyu that it does not already own, saying that the move would allow Wal-Mart to more quickly solve the company’s supply chain and operational issues.
"We believe the steps we've taken this week free us up as a company to move faster to capture what is the second largest (retail) market in the world," Duke said.
• Doug McMillon, president/CEO of Wal-Mart’s Sam’s Club division, told the company’s analysts meeting yesterday that income from membership fees was “behind plan” and not keeping pace with expectations. "It's an area of focus for us right now because we would like to see better performance,” McMillon said.
One possibility, according to McMillon: restructuring the way memberships are sold as a way of generating new traffic and revenue, not to mention mounting a better challenge to the nation’s number one membership warehouse club, Costco.
McMillon speculated that Sam’s would have to go beyond its recent strategy of focusing on small business members, and reach out to the general consumer population – possibly by offering a greater number of membership pricing options.
And, McMillon said, Sam’s is in the process of adopting a new approach already undertaken by the Walmart.com site – allowing shoppers to post product reviews and critiques online.
"I feel good about Christmas," Scott said. "We are realistic about the environment we are in, but we are also optimistic. Our business is very healthy."
• Mike Duke, Wal-Mart’s vice chairman, defended to investment analysts yesterday the company’s decision to spend more than $800 million to acquire the 49 percent of Japanese retailer Seiyu that it does not already own, saying that the move would allow Wal-Mart to more quickly solve the company’s supply chain and operational issues.
"We believe the steps we've taken this week free us up as a company to move faster to capture what is the second largest (retail) market in the world," Duke said.
• Doug McMillon, president/CEO of Wal-Mart’s Sam’s Club division, told the company’s analysts meeting yesterday that income from membership fees was “behind plan” and not keeping pace with expectations. "It's an area of focus for us right now because we would like to see better performance,” McMillon said.
One possibility, according to McMillon: restructuring the way memberships are sold as a way of generating new traffic and revenue, not to mention mounting a better challenge to the nation’s number one membership warehouse club, Costco.
McMillon speculated that Sam’s would have to go beyond its recent strategy of focusing on small business members, and reach out to the general consumer population – possibly by offering a greater number of membership pricing options.
And, McMillon said, Sam’s is in the process of adopting a new approach already undertaken by the Walmart.com site – allowing shoppers to post product reviews and critiques online.
- KC's View:
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I think that online consumer discussions and product reviews is going to be the next great wave that sweeps over the retailing business, and supermarket retailers need to wake up to it sooner rather than later. Ultimately, people trust each other more than they trust the retailer, the manufacturer, or even the media. And the retailer that can facilitate those discussions is going to be one step ahead.
I also have one thought about Mike Duke’s Seiyu comments. While I have no doubt that total ownership will allow Wal-Mart to cut to the chase in terms of Seiyu’s supply chain and operational issues. I’m not entirely sure that Seiyu’s core problem in Japan is, in fact, related to the supply chain and operations. I’ve been told by people who know about these things that there are some broader cultural challenges to Wal-Mart in Japan, and that management may be underestimating those issues, as well as overestimating its own ability to overwhelm the marketplace.
