WAL-MART EXECUTIVE EXPECTS SYNERGY AMONG DIVISIONS 2004-11-08 (2)

ELLIOT ZWIEBACH

PORTLAND, Ore. -- Wal-Mart Stores, Bentonville, Ark., is working toward becoming a truly global company instead of three separate entities, said Doug McMillon, executive vice president, merchandising and replenishment, Sam's Club.

"We have Wal-Mart U.S., Sam's U.S. and the international division," McMillon said, "but we're working hard to share more information across countries and training people in Bentonville to work around the world."

Speaking at Executive Forum 2004 last month, the 10th annual conference sponsored by the Food Industry Leadership Center at Portland State University here, McMillon outlined Sam's business philosophy, which focuses on serving small businesses "because small businesses are important to this country and they allow us to grow."

McMillon said Sam's divides potential business customers into nine segments: retail/food service; convenience stores; vending; day care and schools; churches and other religious organizations; motels; beauty salons and barber shops; contractors/ maintenance and repair businesses; and offices and office supply stores.

"We try to build an assortment that serves those nine segments, and when an item creeps over 50% in sales, we pay more attention to it," McMillon explained.

In a separate presentation, John McKay, senior vice president and general manager for the Northwest region of Costco Wholesale Corp., Issaquah, Wash., said his company goes after a different kind of customer.

McKay said the typical Costco customer has a median household income of $85,000 a year, including 31.3% with incomes over $100,000 a year. In addition, 44% of members are college graduates and 91% own their own homes, he said. "Our objective is to offer the highest quality products at the lowest cost, with total customer satisfaction."