Business Retail
02172015_walmart_AP Sarah Bentham/AP

Wal-Mart store

June 02, 2017

Walmart touts retailing roots as advantage in battle with Amazon

FAYETTEVILLE, Ark. — Walmart CEO Doug McMillon is touting the company's traditional retailing roots as a competitive advantage as it seeks to take sales away from online giant Amazon at a time of industry upheaval.

Speaking Friday at the annual shareholders' meeting, McMillon highlighted a range of approaches Walmart has introduced or tested in the past year, like grocery pickup and technology that tracks food through the global supply chain. The company has also made serious investments in its online operations, buying up several smaller retail sites.

McMillon and other executives also highlighted the company's investments in higher wages and training for its employees.

"We will compete with technology, but win with people," McMillon told a cheering audience."We will be people-led and tech-empowered."

The gathering — part pep rally, part music concert, and only briefly a business meeting — comes as Walmart's moves to meld its online services with its battalion of 4,700 stores are gaining momentum.

Walmart's online sales surged as it tinkered with its shipping offers and other services, and drew more shoppers to its stores as well in its fiscal first quarter. The world's largest retailer has posted sales gains at established stores for the eleventh straight quarter, and customer traffic has risen for the tenth quarter in a row.

The mood at the meeting was upbeat, despite the overall struggles of the retail industry. About 14,000 people packed the arena including Wal-Mart workers from around the world as well as shareholders, analysts and several members of the founding Walton family. Gwen Stefani, Mary J. Blige, Ne-Yo and The Band Perry performed while Blake Shelton, Stefani's boyfriend and costar from "The Voice," served as host.

McMillon highlighted the company's efforts to offer more shopping options, including automated pickup stations in some store parking lots, in-store pickup for online orders, and "Jet Fresh" delivery, which provides grocery delivery in 1-2 days and is available to about half of U.S. households. That service is a result of the company's acquisition last year of online retailer Jet.com.

"The historic trade-off between price and service doesn't really exist anymore," McMillon said.

With faster shipping a key area of competition, Walmart announced on Thursday a delivery service using its own store employees, who will deliver packages ordered online while driving home from their regular work shifts.

The "associate delivery" program would use Walmart's U.S. stores and roughly 1.2 million employees to speed delivery and cut costs, the company said.

Still, amid the company chants and upbeat presentations about employees excelling at their jobs, there were some signs of dissatisfaction.

Two employees, speaking on shareholder proposals, called for Walmart to provide more hours for part-time workers and greater parental leave. Both comments prompted loud cheers from the employees.

Janie Grice, a three-year Walmart employee from Marion, South Carolina, thanked the company for its wage increases, announced two years ago, which has boosted her pay from $7.25 an hour to $10 an hour.

But "too many of us are still part-time," she said. "Too many of us have schedules and hours that change so frequently we can't plan our lives, or line up a second job."

Carolyn Davis, an employee from the Outer Banks, North Carolina, urged the company to provide more parental leave. Salaried Walmart employees get 10 weeks of maternity leave. Full-time hourly workers get six to eight weeks of leave at half pay.

"Investing in associates means that new parents are allowed time to bond with our children," Davis said.

Blake Jackson, a Walmart spokesman, said the company's leave policies for hourly workers are significantly better than most of the industry.

Walmart has invested $2.7 billion in higher wages and training for workers to lower turnover and make the shopping experience more appealing.

The company also spent more than $3 billion for Jet.com last year in its bid to lure younger and more affluent customers. With Jet.com founder Marc Lore installed as head of Walmart's U.S. e-commerce operations, it bought ShoeBuy.com, outdoor gear seller and MooseJaw and trend clothing seller ModCloth.

It's also implemented options like letting online shoppers pick up items at a store for a lower price, and revamped its shipping program to make it more competitive with Amazon's popular Prime plan.

Wal-Mart's financial performance has stood out amid a largely gloomy environment for retailers, including department stores wrestling with weak sales. Target, a key rival, is trying to turn around a string of quarterly declines for a key sales measure and customer traffic.

As a result, investors have been drawn to Walmart's shares. Its shares have risen 13 percent over the past year and are hovering close to $80.

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D'Innocenzio reported from New York.