Walmart China focus of Bloomberg expose
Walmart’s integrity suffered a blow this week in a Bloomberg piece with the inflammatory headline, “How Walmart made its crumbling China business look so good for so long.”
Bloomberg reporters probed Walmart’s business practices in China after a recent deterioration in sales trends and the departure of executives. Although the reversals seem abrupt, cracks in the foundation of Walmart's retail business in China have been developing for years, hidden by questionable accounting and unauthorized sales practices, according to employees and internal documents reviewed by Bloomberg.
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McKenna joins Foran to drive Walmart’s U.S. growth
The globalization of Walmart’s domestic operations continued this week with the appointment of Judith McKenna to the role of chief operating office for Walmart U.S.
McKenna is a relative newcomer to Walmart U.S. but is no stranger to the company or complex operational responsibilities. She currently serves as chief development officer for Walmart U.S., a curious sounding position Walmart created for McKenna earlier this year to lead the strategy, development and growth of Walmart’s small formats, services and digital integration. However, prior to that role she served briefly as Executive Vice President of Strategy and International Development for Walmart International and as COO and CFO of Walmart’s largest International subsidiary, Asda Stores in the United Kingdom.
Her rapid ascension to the role of COO of Walmart U.S. is part of a larger changeover among Walmart’s senior leadership ranks as Walmart Stores Inc., president and CEO Doug McMillon is infusing the domestic stores division with executives from the international division who bring a fresh perspective.
The most notable example of the strategy was evident this summer when Greg Foran was named as a replacement for former Walmart U.S. president and CEO Bill Simon. Foran previously spent three years with Walmart International, including a brief spell as president and CEO of Walmart China, but had never worked in the U.S. prior to being named to his current role.
The arrival of Foran and subsequent promotion of McKenna means the end of Gisel Ruiz’s three year stint as COO of Walmart U.S. She will return to a familiar role in an unfamiliar area as she becomes Executive Vice President of Walmart’s International People Division reporting to Walmart International President and CEO David Cheesewright. Prior to becoming COO of Walmart U.S. in February 2012, she served as Executive Vice President of People for Walmart U.S. and prior to that she held a variety of operational roles of increasing responsibility during a career that began in 1992 as a store management trainee.
“Her proven track record and unwavering commitment to our associates make her the perfect choice for this new role,” Cheesewright said of Ruiz. “The expertise and leadership that Gisel brings are needed as we take our International Division to the next level. I’m looking forward to the impact she’ll have on our associates and business around the world.”
Meanwhile, expectations are high that McKenna will be able to deliver the same type of execution excellence in the U.S. that Asda is known for in the U.K.
“At her core and by experience, Judith is a retailer who has made major contributions to our business throughout her career,” said Foran. “It’s exciting to bring her skills in managing store operations, small format growth, logistics and e-commerce to an expanded role in our U.S. operations. Her knowledge of global best practices and her success in leading our associates around the world will help drive our Walmart U.S. business forward.”
Kroger chairman Dillon steps down
Longtime Kroger executive and current chairman David Dillon is retiring Dec. 31 after 38 years with the company. Dillon, 63, will be replaced as chairman by Rodney McMullen, who also succeeded Dillon as CEO at the start of 2014, the company said. McMullen has served on the board since 2003.
"For Dave, Customer 1st –- which truly put our customers at the center of how Kroger runs its business –- was more than a successful business strategy. It was a philosophy that he believed and lived through his actions every day, and as a result he inspired thousands of our associates during his many years of service to Kroger and Dillons Companies," McMullen said. "He understood that Kroger's greatest asset is the trust that our customers, associates and shareholders have in our company. We are all the beneficiaries of Dave's extraordinary leadership."
Kroger’s Customer 1st Strategy, which Dillon led, consisted of a long-term price investment strategy that has enabled Kroger to deliver sustainable business growth and shareholder returns, while also saving customers nearly $3 billion annually through lower prices, the company said. Dillon served as Kroger's chairman from 2004-14 and as CEO from 2003-13. Prior to that, he held a variety of executive positions at Kroger and Dillons Companies, which merged in 1983. During his tenure as CEO, Kroger grew revenue by $45 billion, created 53,000 new jobs, reduced costs for eight consecutive years and returned $9.2 billion to shareholders through share repurchases and dividends, which were reinstated in 2006.
Under Dillon’s leadership Kroger has become a trailblazer in supermarket sustainability: It has reduced energy consumption in stores by 35 percent since 2000 and reduced its carbon footprint by 4.4 percent since 2006. And more than half of the company's 37 manufacturing facilities are zero waste. Kroger also invested in technology. To understand better what customers want, Kroger formed a joint venture in 2003 with London-based consumer insight-research firm dunnhumby, called dunnhumbyUSA, in Ohio. Other improvements under Dillon’s watch included innovations like Que Vision technology, which tracks customer traffic via infrared sensors and tells store managers how many cashiers and baggers to call up front. The program has cut the average wait to reach the checkout to 26 seconds from four minutes in 2010. The grocer also expanded its network of Marketplace stores, a larger format store that offers some general merchandise like Walmart, but also broader food options.
Kroger employs more than 375,000 associates who serve customers in 2,631 supermarkets and multi-department stores in 34 states and the District of Columbia.