June 3, 2011

Walmart Shareholders' Meeting 2011

Remarks as Prepared for Delivery

I grew up in the rural South and remember what shopping was like before Walmart came to the area. We grew most of our food in our garden. 

What we couldn’t grow, we bought at a small country store. When it came time for back to school, we’d go to the closest big town, Newnan, Georgia, and shop at a five and dime. Each child got a new pair of jeans and maybe a couple shirts. And that was about it. That was shopping for my family and for much of America in the 1960s.

I had already gone off to college when the first Walmart came to my hometown in 1984. What I remember most was the emotional connection between that store and my mother and father. It had everything they needed at Walmart’s low prices. And above all, it had caring associates.

To this day, when I call my mom on Sunday nights, she likes to talk about the associates at her local Walmart. And just a couple weeks ago, when I was shopping with my mom at her store, I saw such great affection between her and the associates. If I didn’t know better, I’d say she likes spending time with them more than she does with me! Clearly that emotional connection, even after thirty years, is as strong as ever.

There are hundreds of millions of people around the world, just like my parents, who want and need a connection to Walmart. Last year, I talked with you about realizing Sam Walton’s vision and building the Next Generation Walmart. Today, I want to talk with you about the Next Generation Customer ‐‐ who they are, what matters to them, and your role in earning their trust and loyalty. For Walmart, serving this customer is a clear and direct path to a stronger business, a better company, and as Sam Walton said: “[giving] the world an opportunity to see what it's like to save and have a better life.”


The world has changed a lot since my parents first shopped at Walmart; so have people and how they live. Our Next Generation Customer will include millions who are striving to join the emerging global middle class. They’re from the countryside around Punjab, India and the blue‐collar suburbs of Sao Paulo, Brazil. They’re in the big cities ‐‐ from the wards of Chicago to the boroughs of New York City. They’re connected to the world through smart phones and social media. They’re in charge of when they shop and how they shop. And believe me, they know who has the lowest prices.

They don’t want to have to choose between products they can afford and products that mean a better life, like sustainably grown local fruits and vegetables. They care about sustainability and like that we do too. They also have higher expectations for the role of business in solving problems. Only those businesses that solve problems will earn trust. “Saving people money so they can live better” earns trust.

Now even though our Next Generation Customer is different in many ways, they’re still bound together by common aspirations for themselves, their families and their communities. These shared hopes and dreams are found in the goodness of people’s hearts and in the driving spirit of their souls. They were in my father and are in my mother. They’re in you and me. They’re in each of our customers and the Next Generation Customer too.

We all share a common humanity. I am a global optimist. I believe we all want to live better in a better world.

All of this adds up to a real opportunity for Walmart. Walmart is the best‐positioned retailer on the globe. I believe that because I’ve seen it. I know whose footsteps I follow in. Think about the images and memories in your mind of Sam Walton, David Glass or Lee Scott. They’re all spending time in stores with customers and associates. Since I stood on this stage last year, I’ve flown 100,000 miles, been to seven countries and walked over 200 stores ‐‐ and a lot of those have been competitor stores. And just over the last few weeks in the U.S., I’ve been to eight different states and dozens of stores from coast to coast. I really believe this: we are right in the sweet spot of the Next Generation Customer. But to succeed, we must also be the best at how we run our business. So I see five priorities to help us do that.


Our first priority ‐‐ growth. Growth in sales, growth in the number of customers, and growth through new stores and acquisitions. I’m so pleased by the great news we received this week from South Africa. Just think about the opportunity to help people save money and live better in 13 new African countries. We are a financially strong and stable company. That financial strength also enables us to really deliver shareholder value. Through dividends and share repurchases, I’m proud that last year your company returned to shareholders a record $19.2 billion. And where is Sam’s Club? Talk about growth. Your sales are fantastic. You have real momentum!

Now there is still a lot of work to do. And it must be done with urgency. That’s why I’m working so closely with Bill and Doug and Brian and Eduardo. Comp sales growth in Walmart U.S. remains the greatest priority for me and the entire Walmart U.S. team. Bill has the right plan, and it is gaining traction. I really like what I’m hearing from customers. And I love the enthusiasm I see from managers and associates. We need to exceed the expectations of the Next Generation Customer around the world. And not starting tomorrow but today. Right now.

Our second priority ‐‐ EDLP and EDLC. Being an EDLP retailer isn’t easy. It takes unwavering strategic commitment and daily execution. But nothing builds more loyalty with customers than everyday low prices. EDLP in every market. No exceptions. No excuses.

To deliver EDLP, to drive growth and really churn the productivity loop, we have to be an EDLC operator. Over the past couple of years you’ve done a great job quarter after quarter of leveraging expenses. And I want to really appreciate you for that. But I know we can do more. Over the past week I’ve started reading Sam Walton’s book again for what must be the third or fourth time. Let me tell you what Sam said about EDLC:

We exist to provide value to our customers, which means that in addition to quality and services, we have to save them money. Every time Wal‐Mart spends one dollar foolishly, it comes right out of our customers’ pockets. Every time we save them a dollar, that puts us one more step ahead of the competition ‐‐ which is where we always plan to be.

No one controls costs better than Walmart because we do it for the right reason ‐‐ it’s all for the customer.

Our third priority ‐‐ global e‐commerce. I am really excited about what Eduardo shared. Over the past two months here in the U.S. and in China, we’ve made investments and integrated new talent and technology. With our stores and low prices, we can really take advantage of mobile technology and this era of price transparency. We can combine our stores, our systems and our logistics expertise into one continuous channel to drive growth and serve the Next Generation Customer around the world. So let me be very clear ‐‐ in global e‐commerce, we will not just be competing; we will play to win.

Our fourth priority ‐‐ talent. We have to be more intentional about developing talented leaders, managers and associates around the world. That means better training and greater opportunity for our store associates. And it means thinking globally and building teams that reflect today’s world. I also appreciate the progress we’ve made with diversity and inclusion. But we’re going to do more, including for women and minorities. And that’s a promise.

Our fifth priority ‐‐ “live better.” We must continue to broaden and accelerate our work to make a difference on big issues. Anyone who has paid attention over the past year ‐‐ to our work on healthy foods, fighting hunger or sustainable agriculture ‐‐ knows we have a model that works and momentum behind it. I loved the headline on a recent news story about our new Global Responsibility Report. It made me so proud. And it’s all a credit to you, our associates. It read: “Walmart Is Crushing Its Ambitious Global Responsibility Goals.” Absolutely crushing! You did that!

Growth, EDLP and EDLC, talent, e‐commerce and “live better” ‐‐ what makes us think that we can do all of this and do it better than any of our competitors? It’s simple. It’s our devotion to our mission. And even more, it’s the Walmart culture. The same culture that drove our growth during our first 50 years can drive our growth for the next 50 years. Walmart’s culture ‐‐ Sam Walton’s greatest legacy ‐‐ is our greatest responsibility. We must keep the Walmart culture strong.


I’d like to close by speaking directly to my fellow associates, especially those who work in our stores and clubs. The only thing that matches my optimism for Walmart’s future is the pride that I have in each of you every day. I want to thank you for everything you’ve done and continue to do. But I also want to appreciate you for what must be done next.

You are on the front lines. You are the ones who serve the Next Generation Customer. You see how they react in real‐time ‐‐ way before insights and sales data make it down to Bentonville. You know better than anyone what works, what doesn’t and how to get better. We need you to lead the way. And I know you will. No one will serve the Next Generation Customer with more passion and greater purpose than Walmart associates. No one will be more committed to exceeding their expectations than you.

After all, the common humanity that our customers share, that my family shared back in rural Georgia, is shared by us all: a better life in a better world; one community at a time; one customer at a time; one human being at a time.

Thank you all.