Business

Read Walmart CEO Doug McMillon’s 2017 Letter to Shareholders

The following letter from Walmart CEO Doug McMillon was taken from our 2017 Annual Report, which was released today. Read the report.

Dear shareholders, associates and customers:

As I sit down to write this year’s letter, I’m feeling proud of the progress we’re making at Walmart and, most specifically, the passion and hard work exhibited by our associates. I’m encouraged by the way we’re moving with greater speed to better serve customers.

Our business is getting stronger. In the U.S., we’ve delivered positive comp store sales for ten consecutive quarters and we’re hearing from our customers that their experience continues to improve. Sam’s Club comp sales improved throughout the year and members are increasingly using our digital tools like Scan & Go and Club Pickup. Outside the U.S., 10 of our 11 markets posted positive comp sales this past year. Across our business segments, e-commerce growth is accelerating. Our strategy to serve customers through e-commerce and our stores in a seamless way is gaining traction. The momentum we’re seeing is real and I’m excited about what the future holds.

We’re clearly living in a time of transformative change. The world is moving faster and the magnitude of the changes, and their influence on business, seem larger than I can remember. In retail, the things made possible by technology are fundamentally transforming this industry. These changes are creating compelling ways for customers to save time and gain easy access to products and services they didn’t have before. At Walmart, we’re harnessing the power of technology and the investments in our associates to create new ways of serving customers and provide associates with more opportunities to grow their careers.

We’ve been preparing ourselves to take advantage of the opportunities presented and we have four objectives that we’re focused on this year. First, we want to make every day easier for busy families. Customers are time-crunched, so we want their shopping experience with us to be fast and easy — truly seamless — in all the ways they want to shop: in stores, on their mobile device, or through pickup and delivery. I’m excited by many of our recent initiatives — like the free 2-day shipping offer with a $35 minimum order from Walmart.com, the expansion of online grocery around the world, and Sam’s Club’s launch of Scan & Go across the U.S. — because of the convenience these initiatives provide. The strategic acquisitions of Jet, ShoeBuy, Moosejaw and ModCloth, as well as the alliance with JD.com in China, provide customers with a broader assortment as well as more ways to save time and money. It’s truly been a significant year of progress on this front.

Our second key objective is to change the way we work. We’re focused on becoming more of a digital enterprise. We’re working to increase productivity with more efficient internal processes and creating more real-time information at our fingertips, supported by more advanced analytics. We’re providing in-store associates with the tools they need, like apps and tablets, to make it easier to gain insight into our performance. Our goal is to increase our speed, effectiveness for customers and productivity throughout the business. We’re also working to strengthen the performance mindset of our culture and fight bureaucracy that can plague large companies. A strong and effective culture is foundational to success and we’re shaping ours to drive performance and create even more opportunity for our diverse group of associates in an inclusive work environment.

Third, we will deliver results and operate with discipline. We were founded on an everyday low-cost mentality but we think we have opportunities to work in new ways and find a path to a lower cost base. This is vital for our future. We’ll be smart with how we allocate capital to drive long-term value for our shareholders. We’re after efficient growth. We will focus on growing more through e-commerce and comp sales in our current store fleet and rely less on new store growth in the U.S. We’ll also continually look at our portfolio to make sure we’re positioned to win. We’ll invest in our core business with store remodels, technology and customer initiatives like online grocery and pickup, while at the same time being open to divest non-core assets if it’s in our best interest.

The fourth objective is to be the most trusted retailer. During this time of change, customers are watching the companies they spend their time and money with more closely than ever. The way we earn their trust is through our associates doing the right thing every day — being creative, curious, ethical, service oriented and embodying our purpose of making lives better for others. If everyone could see inside the company I’ve come to love, they would feel even better about the company.

We’re doing things people would expect from Walmart: focusing on lowering prices — not by cutting corners, but by being better at delivering great items more efficiently than our competitors; and constantly innovating to save customers time as well as money. We’re also doing things that might surprise some people. We’ve made significant investments in our associates, providing the career opportunities they deserve and skills necessary to be successful at Walmart or wherever their career takes them. Over the last decade, we’ve become one of the most environmentally sustainable retailers (and companies) in the world and we’re raising the bar even higher. We’re investing in making our supply chain safer and more transparent so customers can be confident that the products they purchase are sourced the right way. And, we have embraced the journey towards the concept of “shared value” as espoused by Dr. Michael Porter of Harvard Business School, which challenges us to create a business model that is not just good for shareholders but better for everyone: customers, associates, suppliers, communities and society in general.

We’ve worked hard over the years to earn the trust of those we serve and do business with around the world. By no means am I saying Walmart is perfect. We’ll make honest mistakes along the way, but we won’t let up until we get it right. Our purpose is simple: we save people money so they can live better. We take both aspects of our purpose seriously.

We want to thank you for believing in us…for investing in our future. We are a company of the future. As I stated earlier, we’re operating from a strong foundation built by those before us and taking action aimed at strengthening our business this year and beyond. We’ll continue to strengthen our stores around the world, we’ll continue to build our e-commerce and digital capabilities, and we’ll put them together in a way that saves customers time and money. And as they choose to shop with us, we’ll be doing things behind the scenes to create shared value for all so they are confident that their trust in us is well-placed.

Honored to serve,


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U.S. Manufacturing

In the News: Inside Our Open Call for American Manufacturing

Shrimp, hair gel, sweet potato cake.

Forbes sent a film crew to Walmart’s corporate office in Bentonville, Arkansas, to capture the excitement as suppliers pitched these and hundreds of other products at our annual U.S. Manufacturing Open Call event.

Forbes shared its inside look today. Take a look at what the big day is like for the people behind the products.

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Business

‘Outside the Box’ Breaks Down Blockchain

“Blockchain” is one of the latest business buzzwords making its way around the internet. But this is one word you won’t want to ignore.

Technology is improving the retail experience in ways you may have never imagined. And when it comes to food safety, we can see the way of the future. In Episode 2 of our podcast, Outside the Box, our guests will help break down how blockchain is improving supply chain – and in some cases, saving lives.

“Breaking Down Blockchain” features Brigid McDermott, Vice President of Business Development for Blockchain at IBM. She’s responsible for driving the growth of blockchain, an emerging platform that can radically improve banking, supply chain and other transaction networks. You’ll also hear from Frank Yiannas, Vice President of Food Safety at Walmart.

Outside the Box is our chance to bring together some of today’s most brilliant thought leaders, innovators and visionaries to talk about the retail industry and the roles it plays in society and the global economy.

Future episodes will explore topics such as “The Workforce of the Future,” where industry experts dissect the issues that will face employees in the coming years, and “U.S. Manufacturing, where we’ll talk to a business analyst, a merchandise supplier and a government official about the challenges and benefits of making products in the United States.

If you’re a business owner, an entrepreneur, a maker, a doer, a consumer – anyone! — this podcast is for you.

Learn more about the series and subscribe, and tell us what you think in the comments below.

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Innovation

How Easy Reorder is Making Shopping Even … Easier

Peanut butter beats jelly. Water beats soda. Tortilla chips beat potato chips. These are just a few of the things revealed to us by our new Easy Reorder feature.

What is Easy Reorder? Instead of telling you, let me try and show you. Imagine this … last week you purchased diapers while at your local store. Then you realized you forgot a few things. So, you logged onto Walmart.com and purchased wipes as well as some cleaning supplies and paper towels.

The next time you open the Walmart app, you may notice something different. The site remembers the Walmart.com items you purchased, but also the diapers you bought in your local store – including the brand and size.

Easy Reorder, which is available now on desktops and our mobile app, makes it … well, easy for you to reorder items that you previously purchased at Walmart. Here’s the cool part: We’re integrating both in-store and online purchases to provide you with a single spot to view (and repurchase) the items that you buy most frequently – items like dog food, cereal, shampoo and diapers.

Let me share a little bit more on why we’re doing this. I’ll use myself as an example. I have 151 different items on my Easy Reorder list. I challenge you to go online and try and find 100 individual products to build a list. You’ll find it takes a really long time. Now, you can simply go into a Walmart store, buy the things you need and then, when you come home, everything will be neatly organized on Walmart.com. For me, that means that I get to save a ton of time when I need to repurchase the items I’m looking for. Trust me, with two kids at home, I have to replenish the snack cupboard a lot. Easy Reorder is a game changer.

I’m not the only one who loves this feature. Our customers love it as well, and we’re seeing it in our results – Easy Reorder contributed to the growth we saw in the first quarter.

For fun, I thought I’d share some of the top items on customers’ reorder lists:

Easy Reorder is part of our team’s laser focus on helping customers save both money and time by leveraging our more than 4,700 stores and Walmart.com.

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Community

Why This Associate Wants You to Start With #HelloMyNameIs

“Hello, my name is….” It’s a phrase made up of only four words.

It takes very little time to say – it’s an easy way to begin a conversation. Yet, when people say these words, they can have such a big impact.

My late wife, Kate, started the #HelloMyNameIs campaign in 2013 while living with terminal cancer. As a medic herself, she had become frustrated with nurses and doctors who never introduced themselves to her before providing medical care.

Kate had already been speaking to hospitals and conferences about her experience as both a medical provider and a patient, but through the campaign she hoped to share some key values that resonate beyond people working in healthcare: communication, small acts of kindness, putting the patient at the center of every decision and seeing each person as an individual.

Kate was one of the most determined, resilient people I have ever known. I firmly believe that through adversity, comes legacy. July 23 is International “Hello My Name Is” Day – both the anniversary of Kate’s passing and what would have been our 12th wedding anniversary. We invite everyone – from people to corporations – to join us in celebrating Kate’s legacy by introducing yourself and using #HelloMyNameIs.

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