What has Walmart worried
Ask six senior merchandising executives from Walmart and Sam’s Club what keeps them up at night and be prepared for an interesting collection of answers relating to key competitors and assorted challenges.
That’s what Scott Huff, SVP/GMM of consumable at Walmart did this week during a panel discussion with six Walmart and Sam’s Club VP/DMMs during the Emerging Trends in Retail Conference organized by the Center for Retailing Excellence in the Sam M. Walton College of Business at the University of Arkansas.
For Joe Grady, VP/DMM of Candy and impulse merchandising, the biggest concern relates to talent because the pressures of the business mean, “we can’t afford to make a bad hire. My expectation is that we have the best talent on our side and you have the best talent on your side,” Grady told the audience comprised largely of suppliers to Walmart and Sam's Club.
For Al Dominguez, VP/DMM of household paper goods and chemicals, the high level of uncertainty among consumers is worrisome.
“The level of uncertaintly right now about everything is bad for retail and consumers packaged goods companies, but it has become the new normal,” Dominguez said.
In addition to the impact on spending, uncertainty tends to spawn irrational behavior among competitors, according to Dominguez.
Kevin Pate, VP/DMM of consumer electronics, also touched on uncertainty, but noted that genuine innovation has a way of trumping uncertainty. As an example he noted the introduction of the iPad a little over three years ago. The economy was in lousy shape at the time but the product went on to achieve record sales.
Pate also mentioned Amazon as a top concern because the data he has seen shows 83% of electronics consumers use some form of digital to educate themselves before making a purchase.
“How do we integrate with dot com?” Pate asked. “Amazon creates a real threat because that is how people shop.”
According to Tony Airoso, VP/DMM of dairy and fresh business strategy, Kroger is a top concern.
“Kroger is a terrific retailer of fresh, dry grocery and consumer goods and increasingly they are operating the Walmart way by lower their expenses and prices,” Airoso said.
Grady echoed his Airoso’s thoughts on Kroger.
“Kroger is a phenomenal operator,” Grady said, quickly adding that dollar stores the the sheer number of units they operate are also concerning, having added tobacco and space allocated for candy. “Their stores are also much cleaner than they used to be,” Grady said.
Sam’s Club VP of grocery Heather Mayo also touched on digital issues and staying ahead of technology enabled members while making no mention of Costco.
Discussion of the merchants’ greatest concern drew to a close when Al Dominguez told attendees, “don’t get the impression that we are sitting up here shaking in our boots. We’ve always had competitors, but when you are on top of the hill you have competitors coming at you from all angles.”