Walmart U.S. president and CEO Greg Foran, just six days into his new job when Walmart reported second quarter results, shared some general and familiar insights on driving growth.
Given his newness to the position and the fact that his entire retail career has been spent overseas, Foran wasn’t expected to offer a detailed growth strategy during his first time participating in a Walmart earnings call. Instead, the long-time international retail executive recapped the uneven performance of the Walmart U.S. division that occurred during a quarter that ended the week before he was named to replace Bill Simon.
“At the core are the Walmart stores, and my initial efforts will focus on the core,” Foran said. “We will deliver against these key customer requirements: being in stock, clean stores, the right price, the right items, improved service, better productivity.”
Foran said he will be out in stores hearing directly from customers and employees, tracking performance and visiting competitors. Walmart will look to build momentum while simultaneously restoring growth.
“In the early years, a good portion of the growth will come from the current core. However, the marketplace is changing and we will change with it. We have substantial capabilities and assets that position us for future opportunities in the e-commerce market and in new formats. We have been experimenting for years in both the U.S. and in international. I am confident that with a disciplined approach, we will capture more than our fair share of this opportunity.”
Regarding the core, new store expansion was the driver of sales growth during the second quarter at same store sales were flat and a slight decline in traffic was offset by a slight increase in transaction size. Walmart opened 35 supercenters, 24 of which were new units with 11 others the result of store relocations or expansions. In addition, the company opened 22 Neighborhood Markets.
While same store sales at supercenters declined 30 basis points to an unspecified figure, Foran said Neighborhood Market stores produced a 5.6% comp with strength seen in pharmacy, produce, meat and adult beverages. Walmart is on track to open between 180 and 200 Neighborhood Markets this year, Foran said.