The Walmart Supplier Census
Listening to former Walmart executives describe the company’s early days and time spent with founder Sam Walton never seems to get old. That explains why a full house turned out last month to hear what longtime Walmart board member and former president and cfo Jack Shewmaker had to say. As he described the state of retailing in the early 70’s to an auditorium full of people at the Church at Pinnacle Hills for a weekly luncheon, Shewmaker recalled how when he joined the company, “retail was full of payola. I could walk in a competitor’s store and tell you which buyers were on the take because of the items that were on sale and those that weren’t on sale.”
To counter the widespread graft and build a customer-focused organization, Walmart adopted its now well known zero tolerance gratuity policy. The move would alter the course of retailer and supplier relationships for decades although at the time there was considerable resistance.
“It is hard to be that way when the industry you are in is not that way and a lot of people are joining your organization from other companies,” Shewmaker said. Not everyone was able to make the adjustment and by 1974 half of Walmart’s executives had left the company, according to Shewmaker. “It took a long time to convince people we were serious,” he said.
Although the situation described by Shewmaker took place more than 30 years, listening to him to him describe the circumstances that existed then and the type of disruptive change that was needed to transform the business and lay a foundation for sustainable growth, it is easy to see parallels to situation that has unfolded at Walmart in recent years. The company embarked on modern day transformative journey over the past four years that resulted in the implementation of countless initiatives in the areas of merchandising, marketing and operations, many of which were disruptive to longstanding business practices. Executives who weren’t on board with the changes left the company and a new leadership team that embraced the vision set about moving the company forward in some unfamiliar and unsettling ways within the framework of offering low prices, operating more efficiently and achieving growth.
“Wal-Mart continues to have aggressive growth plans. Let there be no doubt, there is no retail competitor here in the United States, or anywhere in the world for that matter, that can deliver the kind of growth that Wal-Mart can over the next few years,” Mike Duke told financial analysts recently.
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Retailing Today ©2009 Lebhar-Friedman, Inc.
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