Walton Family Faces a Tough Decision About Walmart's CEO

Walton Family Faces a Tough Decision About Walmart's CEO Walmart's annual shareholder meeting is Friday, and sure to be discussed will be the news that earnings for the last quarter weren't very good. Net sales for the first quarter of fiscal 2012, which ended April 30, were $103.4 billion, an increase of 4.4% from $99 billion in the same quarter a year ago. Income from continuing operations attributable to Walmart (WMT) for the quarter was $3.4 billion, up 3.8% from the first quarter last year.

Worse than the overall modest gains for the world's largest retailer is the fact that same-store sales for the flagship U.S. operations were down 1.1%

Walmart has tried several initiatives to turn around its domestic operations. All have failed. The latest plan is to open smaller Walmart Express outlets. These locations will be about 10% the size of normal Walmart stores, and will stock primarily food and general merchandise. At the same time, Walmart's Sam's Club unit will begin to offer more groceries.

If this new plan doesn't work, pressure will increase for the board to consider removing CEO Michael Duke (pictured). The success of his tenure has been questioned before, but the board's role is not often discussed.

Walmart's board is made up of 15 people, but only two really count: Chairman S. Robson Walton who has been on the board since 1978, and Jim Walton, who has been a member since 2005. The Walton family holds more than 1.6 billion shares of Walmart, or 48.3% of the total. During the last two years, the stock has significantly underperformed that of rival Target (TGT). That puts pressure on the Waltons to act on the behalf of shareholders, and also on behalf or themselves.

Walmart's board didn't have any trouble ousting former CEO Lee Scott, who served from 2000 to 2009. His record on labor and the environment was criticized for years. The Waltons may decide that it is time to find a replacement for Duke to see if a new candidate can turn U.S. retail operations around.



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James E. Morris

I wish wal-mart well. The us market is becoming smaller while worldwide they are growing. Most large corporations are not surviving by worrying about what americans want. The asian/indian markets are crushing our strength by sheer numbers wanting everything we will eventually have to give up. god help us. We need to increase taxes across the board especially large corporations and tax heavily all businesses that moved jobs out of this country for tax breaks and cheap labor.Wal-marts other problem is they lured millions in by selling low priced chinese goods, made when labor was cheap but now all of these countries workers want more money and better conditions. wal-marts bargains are not very desirable. clothing is shoddy, out of style. A lot of shelfs are half empty for failure to invest in greater stocks. They stopped carrying a lot of items that people liked. They had better start listening to americans, south and north or all their profits will disappear on this path.

June 11 2011 at 9:24 PM Report abuse rate up rate down Reply
tr302

I would be first in line to help "Board Up" some Wal Marts !! Wal Mart, your place to buy Cheap Plastic Crap !!

June 08 2011 at 10:27 AM Report abuse +1 rate up rate down Reply
Ridemyrod53

Walmart needs to think more about there stores here in U.S. And bring all there stores over sea's back home. They think of nobody but them self.

June 08 2011 at 7:52 AM Report abuse rate up rate down Reply
Abu Ibrahim

Very simple solution to the US Economy. If Wall Mart and the other major retailers stop purchasing and importing products from China and start retailing American made products; we will see more than half of the financial crises in America will be solved. The walton family making Billions as net profit due to the import from China, meanwhile the American industry going down, thanks to greednies of super rich, the waltons.

June 07 2011 at 10:57 PM Report abuse +2 rate up rate down Reply
1 reply to Abu Ibrahim's comment
Richard

Couldn't .agree more with your sentiments. However sombody's going to import the Asian stuff and clober the ones who stock only American. items. It's called the march of history. The Waltons provide a service, employing thousands and were they to fail the results would not be to anybody's liking including yours. Sombody is going to pick up the reins. Your idealism is laudable, but that what it is, idealism.

June 08 2011 at 8:35 AM Report abuse rate up rate down Reply
glassgold

Is Wallmart too big to fail?

June 07 2011 at 10:23 PM Report abuse +2 rate up rate down Reply
pkblazer

sorry...it is Meijer

June 07 2011 at 8:28 PM Report abuse +2 rate up rate down Reply
pkblazer

Miejer is the best...never go to Walmart

June 07 2011 at 8:27 PM Report abuse +3 rate up rate down Reply
Brenda Babjak

Walmart needs a new direction, that includes replacing the CEO. One big change during the past year created more layers of management, resulting in managers outnumbering the associates who are the people who physically work in the stores.

At the same time the management budgets went up, the associate budget went down. Serving the customers and keeping them happy with merchandise in stock and enough registers open to expedite the check out requires having sufficient numbers of associates in the departments, at the registers, in the back room, etc. Walmart has touted its customer service and the 10 foot rule (greet and assist everyone you meet) for many years. Obviously, customers are not going to return if the store is always out of items on their shopping lists, if there aren't associates on the floor to assist, and if they do not feel welcome there.

People, in general, would likely prefer a people-oriented store rather than a robotic one. The stockholders would definitely prefer happy customers to unhappy ones. Sam said that Walmart would "fail from within" if it ever went down. Poor judgements at the top, trickling through to the one worker in the store, the associate, have had a severe effect on customer satisfaction.

The managers are taught that they are not supposed to physically work, they supervise. The money spent on so many managers in the store, and giving them 3 on and 3 off, or 4 on and 4 off, cutting back on "working" associates resulted in decreased sales and productivity. I believe that Sam would recognize this if he were here. The "Back to Basics" motto should have been "Hey, lets all get back to work!"

June 07 2011 at 8:06 PM Report abuse +2 rate up rate down Reply
Andy Stack

I also shop elsewhere whenever possible. Wal Mart has a policy where the employees who are the most valuable are treated the worst and paid the worst. If you've ever worked there, you know what I'm talking about. The people out on the floors are the ones making the money for the stores, but they are treated the worst and paid the least. Wal Mart does create some jobs, but they also do a lot to destroy local economies by stifling competition. And we all know that most of the 'high quality merchandise' is crap from China. I think Wal Mart must be padding politician's pockets because I'm amazed that no one is talking about penalizing them for the amount of Chinese crap they've brought to the U.S.!!!

June 07 2011 at 7:35 PM Report abuse +4 rate up rate down Reply
PoggeB

I used to love our little Wal-Mart back when it was one of a number of small stores in our little town. Then Super Wal-Mart came in and pared away just enough of the other small business' profits to put them in the red. Once the fabric stores, craft stores and small groceries were gone Wal-Mart raised it's prices or eliminated the competing departments entirely. Now those of us who don't care for the noise and poor selection make a list, spend a little extra money and shop in the nearest city. There are more and more of us and nothing Wal-Mart can do will ever bring us back into their stores. If I need a can of spray paint at 3am yes, but for anything else I pay the extra money and go elsewhere.

June 07 2011 at 7:18 PM Report abuse +3 rate up rate down Reply