Last week, WMT’s full year guidance was ratcheted even lower than analysts’ already bleak expectations. Over the past three months the stock had fallen by nearly 6% (vs. a 3% increase in the overall market during the same period). In prerecorded remarks incoming WMT US CEO Greg Foran said “Walmart U.S. is a great business, with a deep and rich heritage in serving our customers with a smile, in clean, tidy, well-merchandised stores, with terrific low prices and value. A cornerstone of our success has been our wonderful associates, from our stores to our DCs, our Home Office and e-commerce facilities. They still are.”
He added “We will deliver against these key customer requirements: being in stock, clean stores, the right price, the right items, improved service, better productivity. I will be out in stores hearing directly from our customers and our associates and tracking our performance.”
Foran was right to focus on associates in his first public role as US CEO, and he clearly perceives that the company’s US workers are at the center of a major strategic challenge that involves operations, culture and reputation. We believe many US associates would welcome the opportunity to describe the problems they are facing in the stores, and we hope this well-timed overture goes beyond the one-on-one “open door” policy which has come to represent an empty promise for associates across the US.
Mr. Foran, in an effort to begin this dialogue we respectfully offer you three questions:
1. It’s clear you and Doug McMillon want to accelerate the small format and ecommerce strategies, but are you also ready to make the investments in labor required to give those strategies a chance to succeed?
2. We welcome your fresh perspective, not just on strategy, but on company culture as well. There is widespread concern about fairness and respect at WMT. For example, when executives’ bonuses are insulated from the effects of SNAP reductions while hourly associates’ bonuses are not, the message is clear: we are not all in this together. Will you commit to fixing this culture?
3. WMT’s reputation has been damaged by its labor practices and this in turn has made it harder for the company to expand into profitable urban markets in the US. Are you ready to adopt a more collaborative approach?