New York City Lee Scott, chief executive of Wal-Mart Stores Inc., said Monday he expects the U.S. economy to remain “extraordinarily challenging” for retailers during the first half of the year, and that he hopes the second half will be better.
“I don’t see anything that tells me it’s going to turn around quickly,” said Scott, during the opening session of the National Retail Federation’s annual conference in New York City. He described it at his last public speech as chief executive of Wal-Mart (Scott retires on Feb.1, and will be succeeded by Mike Duke, vice chairman of Wal-Mart International).
In a frank assessment of the U.S. economic scene, Scott said he believed the downtown may result in a fundamental shift in U.S. consumption and that, going forward, consumers may not be as willing to accumulate debt and splurge as freely as they have in the recent past. In some ways, he added, this change is healthy.
“People still have money, but it is very targeted to things they want,” Scott said.
More than ever, retailers need to understand their customers and their inventory, and have buyers who are in touch with customers’ needs, he said.
Scott touched on the economy during a question-and-answer session with NRF president Tracy Mullin, who also queried the retailer as to the most important lesson he had learned during his career.
“I learned that in a big organization, you have to hire people who are better than you, and you have to give them credit,” Scott said.
As to his personal legacy, Scott said he wants to be able to walk out of his office on his last day, and be able to believe that Sam Walton would be proud of what he and his team have accomplished. He noted that he plans to ease into retirement, and will be staying on with Wal-Mart for two years.
The question-and-answer period with Mullin followed Scott’s formal address, during which he urged retailers to work with government leaders and tackle the “hard issues” facing the country, including health care, energy, immigration and education.
“To those who say that now is the not the time for health-care reform, for a new energy policy, for higher quality schools, for comprehensive immigration reform, I say you are wrong,” he said. “We cannot afford to postpone solving these problems.”
Scott said building shareholder value can coincide with solving people's problems, adding that he had seen it happen with Wal-Mart's $4 prescription-drug program.
"As businesses, we have a responsibility to society,” he said.