Published reports in recent months have suggested that Mike Duke could be nearing the end of his run as chief executive of Wal-Mart Stores. While officials of the company have said they would not comment on such speculation, observers would agree Duke’s already had a career’s worth of tumult at the head of the world’s largest retailer since 2009.
“Mike Duke has more challenges than any retail CEO worldwide,” according to Burt P. Flickinger III, managing director of Strategic Resource Group, New York. Flickinger cites everything from store stocking issues in the U.S. to unrest in international markets, and said he believes the board’s focus on investor sentiment — conditions present throughout Duke’s tenure — is largely to blame.
“He’s got a tough challenge in that his predecessors set a program to maximize shareholder value with stock buybacks and increased dividends, and as a result they have eliminated about 50 workers per store, according to the New York Times study,” Flickinger told SN. “The board has also cut working capital, which has meant more out of stocks in stores.
“From what we’re seeing is Wal-Mart looks great during the week but they just don’t have the staff to stock the shelves on Saturday and Sundays,” he continued. “Without question it’s the worst out-of-stocks in America. That’s an issue he’s inherited from predecessors.”
Flickinger said Duke has also faced a challenging climate internationally, facing political unrest in some markets in Africa and unfriendly business climates in places like China.
To hear Duke’s take on the same issues is to see another side of the coin. Investment in foreign markets can be tricky, but it’s a growth engine as Wal-Mart helps to usher people around the world into the middle class. The company’s workers have a similar chance to rise. This theme of Wal-Mart as a vehicle to raise workers and communities is at the center of the “Real Walmart” campaign launched this spring.
“Wal-Mart is a path forward and a ladder up,” Duke told employees during the company’s annual meeting last month. “That’s true for our associates and it’s true for our customers. When I look out on the world, whether it’s Hoover, Ala., or Dailan, China, I see Wal-Mart helping tens and even hundreds of millions more people to save money and live better.”
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Duke, who joined Wal-Mart in 1995 after a 23-year career with the Federated and May Department Store chains, makes no apologies for the company’s performance on Wall Street, either. Its stock is up by more than 40% over the last two years, reflecting an emphasis on efficiency he has championed throughout the organization.
As Duke points Wal-Mart to the future, it’s with an increased emphasis on digital technologies, and on improving U.S. stores’ competitive edge, particularly with food. The former initiative is seeing heavy investment and a commitment to increase global Internet sales to $10 billion during the current fiscal year. Food is seeing new programs around fresh produce, designed to increase consumer trust in the same manner a fresh meat program did a year ago. These efforts join an ongoing price-comparison campaign officials say has helped Wal-Mart regain a price leadership message that eroded in the months before Duke ascended to the CEO role.
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