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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Innovation

Tracking Turkey: New Tech Tells the Farm-to-Table Story

Taking that first bite of Grandma’s green bean casserole made from your family’s secret recipe. Watching football with your Uncle Bob who falls asleep before half time. Giving thanks around the dinner table with family.

These moments give us Thanksgiving Day stories to tell for future generations. But as we enjoy that feast and time with loved ones, there is another story to be told – one that starts with a family of farmers laying feed for their turkeys.

As the senior buyer for turkeys and hams, I’m excited about helping make Thanksgiving meals even better. We believe customers shouldn’t have to choose between products that are affordable or good for the environment, so we are working with suppliers like Cargill to offer items that are good for families, communities and the planet. Part of that is providing customers with easy access to information, which gives them peace of mind that they are purchasing the best products for their families this holiday.

For the first time this Thanksgiving, we’re testing new blockchain technology on packaging of Fresh Honeysuckle White® turkeys, in the Texas area, allowing customers to get the full story behind the star of their meal by tracing their turkey from a family farm to their table.

This turkey technology is innovative, but also pretty simple. You just go to Walmart and pick out a turkey, then text or enter the package’s code at HoneysuckleWhite.com, where you’ll see stories of the family farmers who raised your specific turkey. You’ll also see a message directly from the farmer.

Customer desire for more information led to the development of this blockchain-based solution for turkeys. In 2014, the Honeysuckle White brand found that 44% of turkey consumers think it’s important for companies to be transparent in their practices. Studies in 2016 showed 73% of consumers feel positively about companies that are transparent about where and how their products are made, grown or raised. And more than half of consumers consider farmers one of the most-trusted sources on food-related issues. This year, the Honeysuckle White brand held focus groups that confirmed consumers feel good about buying turkeys raised by family farmers.

It’s important for us to work with suppliers to drive transparency in the supply chain and share information with our customers. Cargill will use the pilot as an opportunity to learn more about the value of traceability in its turkey supply chain. And this test is a great example of an answer to our customer’s needs. Having worked for Walmart for more than 26 years, I still get excited about finding new products and innovations for our customers. Trust and transparency is a huge part of it, and this turkey test is only the beginning.

For more information on these turkeys, the farmers and the blockchain technology, click here.

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Business

Who is Parcel? What This Delivery Company Means to Walmart

The newest member of the Walmart e-commerce family is Parcel, a technology based, same-day and last-mile delivery company specializing in perishable and non-perishable delivery to customers in New York City. They also provide services like scheduled evening delivery and custom text message notifications for high-growth e-commerce companies looking to differentiate their customer experience.

So, what does this all mean for Walmart? We caught up with Nate Faust, senior vice president, Walmart U.S. eCommerce Supply Chain, to find out.

Why acquire a delivery company?

Delivery is increasingly one of the most important elements for today’s online shoppers, as demands for speed, flexibility, and reliability continue to grow. That’s why my team spends a lot of time thinking about ways we can make deliveries faster and more convenient for customers. Parcel is a proven leader in e-commerce package delivery, including taking fresh, frozen and perishable food, the last mile – that is, the last step in the shipping process as products make their way from a fulfillment center to your door.

What are your plans for Parcel?

Parcel has partnerships with several meal kit, grocery and e-commerce companies, and has delivered more than 1 million meals in the past two years. So our immediate plan is for Parcel to continue serving its existing clients and growing its customer base. There’s a lot of upside and I’m excited about the potential there.

But I see even more upside for our own same-day deliveries. Jet has been testing free same-day delivery of certain orders to customers in New York City. We can build upon that and plan to leverage Parcel for last-mile delivery to customers in New York City – including same-day delivery – for both general merchandise as well as fresh and frozen groceries from Walmart and Jet.

Jesse Kaplan, CEO and Founder of Parcel

Can you tell us more about their operations today?

Parcel is a 24/7 operation that delivers packages the same day, overnight and in scheduled two-hour windows. They’ve built a technology platform from the ground up to automate their operations and provide clients and customers with live updates throughout the delivery process. From a warehouse in Brooklyn, Parcel receives packages destined for customers throughout New York City. Using routing algorithms, a fleet of leased trucks, and a professional, employee-based workforce, they’re able to quickly sort and load packages for delivery routes.

How much did Parcel’s New York location factor into the decision to acquire them?

New York City is the top market for both Jet and Walmart.com, and because of the density of the area – along with the proximity of our fulfillment centers – it’s the perfect place for high-impact innovation. Born and bred in New York City, Parcel has developed unique expertise delivering to customers in a distinctly challenging and essential market. This acquisition allows us to continue testing ways to offer fast delivery while lowering our operating costs.

Outside of large metro areas, do you think customers really want same-day delivery?

Customers’ expectations around delivery and what is possible have changed significantly in the past couple of years. Whatever they need and however they’d like it, we aim to provide – including the ability to offer last-minute ordering with same-day delivery service.

And while customers are looking for low prices, we also know they want convenient experiences that make shopping easier. It’s why we’ve focused on creating more options to meet their needs, such as our free two-day shipping to home, our pickup discount and free online grocery pickup service. It’s also the reason we’ve been testing a number of different innovations at Walmart and Jet to further enhance how we serve customers even faster, with programs ranging from associate delivery to in-building and in-fridge delivery with Latch and August Home. We’ll continue to explore more ways to give customers the freedom to choose how, when and where they receive their orders from us.

For additional facts about Walmart's acquisition of Parcel, check out this fact sheet.

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Community

Acre for Acre Promise Preserves Nature for Generations

As a parent of four young children, watching their reaction to seeing a family of deer walking through a shallow stream will always be one of my fondest memories.

The smiles, giggles and amazement on their faces: It was nature in its purest form and something I hope to be able to experience with my children’s children one day.

Conserving one acre of wildlife habitat for every acre of land Walmart developed was the goal of Acres for America, which was founded in 2005 by a partnership with Walmart and the National Fish and Wildlife Foundation. That was a commitment of $35 million over 10 years.

That original goal has turned into one of the most impressive collaborations in U.S. land conversation history. In 2015, Walmart renewed its commitment to the program by contributing an additional $35 million over 10 years, with a goal of protecting an additional 1 million acres across the nation. And now the program is creating eight new land conservation projects across Hawaii, Northern California, Southern California, Montana, Texas, Michigan, Minnesota and North Carolina, which will protect and connect wildlife habitats across more than 100,000 acres through $3.8 million in grants and $81.2 million in matching contributions.

The 2017 grants include a rare native Hawaiian forest, longleaf pines in Texas and sustainably harvested forestlands in Minnesota and Montana. They protect ancient redwoods in northern California as well as 1,600 year old bald cypress trees in North Carolina, the oldest known trees east of the Mississippi River.

I’m excited that Walmart is working through their Acres for America program to ensure those beautiful habitats are around for generations to come – one acre at a time.

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Opportunity

These Vets Helped Each Other - Now They Pay it Forward

For veterans leaving the military, transitioning to civilian life can be a challenge, but Jarred Crabtree and Jeff Kowalik are determined to make it a little bit easier.

The two met in the U.S. Army, where Jeff was Jarred’s lead drill sergeant in basic training. An injury sent Jarred home earlier than he’d anticipated, but the two kept in touch over social media. When Jarred learned his former drill sergeant was leaving the Army, he knew he had to reach out.

Jarred had made the transition from military to civilian life twice before. After a time in the Army and seven years in law enforcement, he had become a market manager for Walmart’s Oklahoma City stores. He was still at Walmart when he rejoined the Army and met Jeff in 2010.

“When I injured myself, it was devastating,” Jarred said. “But the group of veterans when I came back was so supportive, I immediately felt better – like I could put all my energy and skills back into my job here.”

After 18 years in the Army, Jeff was medically retired and having the all-too-common experience of struggling to find...

Posted by Walmart Today on Sunday, July 30, 2017

Jarred wanted other veterans to experience the same kind of support and community he had, so he invited Jeff to come tour one of his stores in Oklahoma City, where they had several developmental co-manager positions open.

“I couldn’t think of anyone better for the role,” Jarred said. “I remembered Jeff’s leadership skills and his ability to lead diverse groups of people. He had the skill sets we needed.”

During his 18 years in the Army, Jeff had never had to look for a job. “When you leave the military, you have to remember how to do everything again,” he said. At Walmart, Jeff had to learn a new lingo and a new role, but he said it goes hand in hand with what he learned in the military. “The leadership, how hard you have to work, the service – there’s an honor behind what you do here.”

Jeff and Jarred are passionate about having other veterans join their teams at Walmart. They know the value veterans bring: professionalism, adaptability, teamwork, problem solving and ingrained leadership skills.

“If you want a job, all you have to do is come apply. You don’t have to start at the top, but with dedication and hard work, you’re going to move up,” Jarred said. “There’s so much opportunity, and it’s not just on the sales floor. With all the positions we have, whether it’s in operations, support, merchandising – when people realize what’s available, they’re amazed. You can lead people, and that’s what Jeff and I get to do every day.”

Now, Jeff mentors his team members at Walmart and in the broader veteran community. He works with the Veteran Support Foundation, which supports various veteran projects across the country, including helping homeless and disabled service members. He also maintains the veterans’ appreciation board at the front of his store, a photo display that recognizes associates who have served in any of the military branches.

“There’s a brotherhood and sisterhood that ties you together,” Jeff said. “When I came to Walmart, it was extremely heartwarming to know I had someone like Jarred, who was also military and also a leader above me who I could learn from.”

Jeff and his family have since moved to Houston, where he’s a co-manager of a Walmart supercenter, and his wife Jennifer is an assistant manager at another supercenter nearby. Meanwhile, Jarred was promoted to a director of implementation and sustainment. That means he’s now the main point of contact for Walmart’s central division of stores to ensure they’re operating successfully. But both veterans are taking what they learned and continuing to encourage other veterans around the country.

“Don’t give up,” Jarred said. “That’s the biggest message I’d want to get across to other veterans: there’s something out there for you. Ask questions. Don’t just apply online – come visit the store. Come talk to us, because you’ll find more people like me and Jeff who want you working with us.”

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