Walmart's Plan to Restore Sales Momentum and Supplier Relations Unveiled

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July 27, 2010

Under the leadership of new CEO Bill Simon, it appears Walmart’s U.S. division is going back to the future, so to speak, with an aggressive plan to boost sales and repair strained supplier relations.

Bill Simon

This new plan was reportedly discussed and fleshed out by senior level executives and the company’s merchandising team at a meeting this week at the company’s headquarters, according to a Retailing Today report.

The new plan, coined Project Rewind by Retailing Today, rekindles Walmart’s traditional mode of operations whereby autonomy and empowerment will be returned to the merchandising team to properly run the business, according to an anonymous source.

Improving supplier relations also bubbled up as a key priority, and buyers are instructed to work more collaboratively with them, as well as “have fun, take thoughtful risks and recognize there is power in assortments,” the report said.

Leading the meeting were Simon, Mike Duke, President and CEO, Lee Scott, former president and CEO, and Doug McMillon, Walmart International president and CEO.

The new plan is a large departure from Project Impact, a program initiated by former stores division President and CEO Eduardo Castro-Wright, now heading Walmart's global sourcing and Global.com business, and former chief merchandising office John Fleming, who resigned a few weeks ago when Simon was promoted from COO to CEO. Project Impact cut product assortment, reduced promotional displays to give stores a cleaner look and included numerous supply-chain initiatives.

Although some of Project Impact’s strategies worked, Walmart lost sales momentum and suppliers became “increasingly alienated by the command and control style of Castro-Wright and Fleming,” according to the report.

"You are officially unleashed to run your business," Duke reportedly told buyers at the meeting.

SBD Views: Walmart continues to demonstrate an ability to acknowledge errors and make adjustments in structure, staffing and operations. It will be interesting to see how the role of store brands will evolve across the store in light of the renewed authority given to Walmart merchants. -- John Failla for Store Brands Decisions

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