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Wal-Mart Stores, the nation’s largest retailer, is back on top of its own game, and Lee Scott is leading the way.
After several years of trying to remake itself into something it wasn’t, with more upscale merchandise, Bentonville, Ark.-based Wal-Mart has returned to its roots, with an emphasis on low prices and more value-oriented merchandise — just in time for consumers struggling to cope with the economic downturn.
With its new slogan — “Saving people money so they can live better” — Wal- Mart believes it will be able to unlock its full potential, Scott, the chain’s president and chief executive officer, told the company’s annual meeting in June.
“Saving money has always been a part of who we are, and living better is now a real part of our company too,” he said. “That connection, and our understanding of its potential, is making the difference between the great company we have always been and the even better Wal-Mart we are today.
“We are there for people now more than ever before. It is how we are saving people money; what those savings really mean to people’s lives; and how together we make a difference in the world and in our common future.”
Under Scott’s leadership, Wal-Mart has made progress both on the performance front and in its effort to improve its image with the public.
“Scott got Wal-Mart out front when ‘green’ was less mainstream, and pursuing ‘green’ initiatives is regarded as such a universally progressive thing to do that it is changing consumers’ perceptions of Wal-Mart in the blue states,” Andrew Wolf, an analyst with BB&T Capital Markets, Richmond, Va., told SN.
Asked whether Scott could have turned Wal- Mart around without the weakened economy, Wolf said, “Things wouldn’t look as good as they do, but they would still look better than a year ago because of the perceived and real progressive ideas in play there.
“Two years ago Wal-Mart was facing both financial and societal headwinds,” he said. “It was expanding its business upscale to go after Target and didn’t stay true to its roots. But in the last couple of years, having realized that was not working, it’s gone back to price and value, which fits precisely with what people are looking for in this economy.”
After unveiling plans to curb its supercenter growth last year, Wal-Mart is also looking ahead to new formats — it plans to open a new, smaller prototype store called Marketside that will offer meal solutions at four locations this fall in the Phoenix area; and it is developing a new supercenter prototype of 150,000 square feet with new department titles, less signage, more curved lines and earth-tone colors replacing the traditional battleship blue and gray, plus a new “Walmart” logo.
Scott is also succeeding in placating investors — Wal-Mart’s stock has been one of the few success stories in retailing this year, with a gain of about 18% through the first half of 2008. As of last week, it was just a few percentage points off its alltime high.
— ELLIOT ZWIEBACH
