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

Helping Americans Sleep Easier, Sinomax Brings Hundreds of Jobs to Tennessee

Manufacturing has always been a hallmark of Tennessee’s economy.

As commissioner for economic and community development in this great state, it’s my job to find lasting opportunities for growth and make them available to the members of our communities.

Tennessee’s commitment to innovation has put us at the forefront of today’s manufacturing renaissance. One of the more recent investments in our state comes from Sinomax – the largest producer of polyurethane foam bedding in China, which now has a facility in La Vergne, Tennessee.

We’re seeing a growing trend of companies reshoring production to the U.S., simply because it is more cost effective to produce and distribute products here. But to the members of these communities, this trend means so much more. While making it a goal to fill its workforce from the local crop of talent, Sinomax has committed to provide 350 La Vergne-area residents with high-quality, family-wage jobs.

I believe the U.S. manufacturing trend will not only continue, but also build momentum to become even more competitive in the years ahead. To stay competitive, we know that companies need a team of qualified workers who can excel in today’s manufacturing environment. Tennessee is fortunate to have an excellent governor who has truly become a pioneer in higher education. Because of initiatives like Tennessee Promise and Tennessee Reconnect, which offer all Tennesseans the chance to earn a postsecondary degree or certificate free of tuition and fees, our state leads the nation in developing and maintaining an educated, well-trained workforce.

We’re sending a clear message to employers about our commitment to building the highly-skilled workforce they need to face the future of manufacturing. And an investment in American jobs and manufacturing means we’re also providing our neighbors with an environment that creates a sustainable path into the future. We are grateful for companies like Sinomax that choose to invest in our state – and our people.

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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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Sustainability

One Company is Helping Keep Walmart and Our Communities in the ‘Green’

Glenn H. Garrett set a standard for protecting community waterways long before “going green” became a common refrain.

In 1996, after witnessing the damage left behind by hurricanes earlier that year, the disabled Marine Corps veteran launched his own business, Retention Pond Services, in his hometown of Wilmington, N.C.

The storms had destroyed the basins that hold stormwater and they were overflowing. Glenn decided to do something about it. Luckily, four years in the Marine Corps – from 1980 to 1984 – prepared him for the hard work ahead.

“It’s not glamorous, not high tech. It’s done with good, old-fashioned manpower,” he said of his business.

Glenn developed a relationship with Walmart in 2002 when a store in Wilmington had a runoff issue in the parking lot. Walmart’s construction division called the state’s stormwater regulators and asked for a recommendation on whom to hire for help. Retention Pond Services was their answer.

When the same issue happened again, this time at another store, Walmart decided to expand the maintenance procedures developed with Glenn’s company. From there, it went nationwide.

Retention Pond Services now repairs, maintains and services stormwater systems for 1,200 Walmart stores and Sam’s Clubs across the U.S. The goal is to help Walmart meet rules and regulations set by the Environmental Protection Agency and reduce the risk of water pollution.

“I remember my first meeting with Walmart [representatives], and they started talking about being ‘green’. I had never heard anyone talk about green – being environmentally conscious,” he said, adding that the retailer encourages suppliers to be responsible by leading by example.

He didn’t realize it at the time, but Glenn and his company would play a major role in bringing that to fruition. He said Walmart has become a standard bearer of stormwater maintenance for big-box retailers throughout the U.S.

Retention Pond Services began with 16 employees. Fast-forward 20 years and it now employs as many as 250 workers each year, including Glenn and three other senior leaders, with clients ranging from retailers to municipalities. The number fluctuates with the seasons, but one thing remains constant – there are always military veterans like Glenn on staff. Several veterans started in junior positions and moved up through the ranks.

The business was hiring veterans before Walmart introduced its Veterans Welcome Home Commitment in 2013, but Glenn said the initiative is a great encouragement for suppliers and veterans alike. “It goes back to [Walmart] recognizing our service and appreciating what we’ve done,” he said. As a veteran himself, Glenn knows that the skills and can-do attitude learned in the military easily transfer over to civilian jobs. Glenn takes pride in his team – “I’m only as good as my worst employee” – and in protecting the environment. Much of that pride stems from his childhood in Chesapeake Bay, Maryland.

“My grandfather used to tell me how great fishing was – about catching massive fish. When I was growing up, there were no fish. The bay was essentially dead, killed by pollution and runoff.”

In the 1970s, Maryland got involved in a save-the-bay campaign, and the federal government’s Water Quality Act followed in 1987. Those actions helped return fishing in the bay to its former glory.

Caring for the environment comes at a cost, whether it be time or money, but the results are well worth it. As U.S. businesses continue to grow, Glenn and his team are ready to step in and protect our communities.

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Opportunity

Retired Store Manager Fashions Second Career Out of Dreams and Opportunity

Sometimes it’s not enough to follow your dreams. You also need someone else to see your potential.

My career at Walmart was a dream – so unanticipated! And that set me up to follow yet another dream. After nearly 20 years, I retired Feb. 17 as manager of supercenter #2914 in Massillon, Ohio, to start my own business as a fashion stylist – something I’ve been passionate about for years – and to spend more time with my precious family.

I have long had an interest in fashion, starting back when my mother was a seamstress and would create her own designs as I was growing up. Most of my wardrobe was handmade by her! I always loved how wearing something special made me feel. Working at Walmart, particularly with women, rekindled a passion in me to witness the impact of dressing well. Increased confidence, better communication, direct eye contact – we all know how that feels. Feeling positive about ourselves can be transformational.

My retail career had simple beginnings in 1997, when I was a stay-at-home mom with five small children in a single-income family. That August I was looking to get a little extra money for Christmas and applied for the first clock-in-and-out job of my life. Walmart hired me as a temporary associate despite my having dropped out of college to start a family and having zero experience in retail. I never would have dreamed I’d take a job stocking store shelves overnight and end up managing 500 people.

This company backed me every step of the way, seeing and believing in a potential I didn't recognize. One of my first store managers took a significant interest in challenging and pushing me to see opportunities that existed. It taught me how important the human touch can be.

I remember one young man who was doing a really good job as an hourly supervisor at my store. Not long after we talked about his potential, he put his job in jeopardy by clocking in late on multiple days. Instead of giving up on him, his direct supervisor asked him what was going on. He shared that his car had broken down, and with no other transportation he’d had to walk the four miles to and from the store. After hearing this, I bought him a bicycle to help put him back on the right track. He ended up going into a management program and is doing really well today.

As for me, my story has come full circle. Walmart not only gave me the acumen and process to run my own business, it also gave my husband and me the financial security to start this second phase of our lives. My baby was in kindergarten when I started my career, and now all my children are grown and college-educated. Freedom in my schedule allows me to be a stay-at-home grandma to five grandchildren.

Having been at the Massillon supercenter for the last four years, it was bittersweet to turn over my keys and the responsibility. But, I’m excited to continue being a cheerleader from the outside. The people I hired are going to go even further than I did with the belief they can have limitless careers.

Photos courtesy of Massillon Independent.

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