The first half of the fiscal year has been extremely interesting for the world’s largest retailer. Starting off the year, Wal-Mart posted another decline in US comparable sales. At the time, the decline spanned for the fourth straight quarter. The boost from the holiday season never occurred as Wal-Mart had hoped.
In the second quarter, more change was in the wind. This time the change was in the form of people moves. In an almost complete shift of power, Eduardo Castro Wright was out as Vice Chairman. He assumed the role of President and CEO of Global.com. William “Bill” Simon was promoted to President and CEO of the U.S. stores. John Fleming, Chief Merchandising Officer, was leaving for personal reasons and Dorothy “Dottie” Mattison, Executive over Apparel, was out.
On top of the executive moves, the U.S. stores division posted another decline in sales versus the previous year. With all of the moves, who is filling the shoes of the Chief Merchandising Officer? According the CEO Bill Simon, Wal-Mart is going to streamline the role of the Chief Merchandising Officer into “four core merchandising areas”. The areas will surround general merchandise and replenishment, apparel, food, consumables, health and wellness, as well as Walmart.com.
The merchandising departments will be run by four Executive Vice Presidents, Jack Sinclair, John Westling, Andy Barron, and Duncan MacNaughton, respectfully.
With struggling U.S. sales, the moves represent a streamlined approach to sales growth. Even with deep price cuts this summer, Wal-Mart could not bring customers it gained during the recession back into its stores. Tom Schoewe concurred the deep discounts didn’t produce the desired results.
With apparel being a department where customers spend discretionary money, why not leverage with an external source as Chief Merchandising Officer? If the Chief Financial Officer agrees “apparel is not where we want it to be,” then the world’s largest retailer needs more than alignment to produce results.
Best case scenario is Wal-Mart must align its cost controlling strategies with sales growth. The savings need to be but into assortment their core customers want to buy, more than basics such as socks and underwear.