Walmart CEO: 'What Has Happened Here in Produce?'

Acknowledging the chain’s fresh food progress but wary of taking a victory lap, Walmart CEO Doug McMillon declared that the big retailer has caught up to its conventional rivals in fresh food quality and is now moving to present it “in your face” behind the newly announced “Produce 2.0” initiative.

Asked during an investor conference this week how Walmart sees its fresh food quality vs. large conventional rivals, McMillon said “we match up,” but was quick to add, “I don't want to have our team get comfortable.”

“We have a really competitive quality offer and a great value in produce today,” McMillon said at the Barclays Gaming, Lodging, Leisure, Restaurant & Food Retail Conference, according to a Sentieo transcript. “I'm excited about that.”

Walmart considering itself on par with rivals in fresh food is not a remark officials would have made a few years ago. But detailed work on product sourcing and handling that improved speed to shelf and, finally, an increase in hours on the produce floor—“I think we were shorter on the number of hours we should have put into fresh to begin with,” McMillon said—has helped in-store execution and presentations improve.

These lessons are now being showcased in improved layouts at stores as part of the “Produce 2.0” initiative, a merchandising set expected to be introduced in about half of Walmart’s Supercenters by next summer.

McMillion described walking into a store where those changes were made and being surprised by the look and feel.

“It looks like a fresh market,” he said. “There’s a lot of color. It’s in your face. It feels aggressive from a merchandising point of view. And I walked into my first one in the El Paso market months ago and didn’t realize I was walking into a Produce 2.0 store. But when I walked through the door, it hit me, ‘What has happened here in produce?’ And then I was able to process and figure out, ‘Oh, they put Produce 2.0 here.’ It’s got that kind of impact.”