Greg Penner: Delivering the Future of Retail

June 2, 2017
Remarks as prepared for Greg Penner, Chairman of the Walmart Board of Directors, Wal-Mart Stores, Inc.

Good morning, Walmart! It’s my honor, as your chairman, to formally open our 47th Annual Shareholders Meeting. Thank you to the host, for that kind introduction. And I really mean that. Much better than that guy, James Corden, last year!

At our Shareholders Meeting, we conduct our share of business. But most of all, we like to have fun. That’s how Sam Walton wanted it to be. Sam started doing shareholder meetings like this many years ago to drum up interest in our company. He wanted to show people why we’re different and to celebrate with associates from our stores. This is a picture of Sam and Helen canoeing -- not on one of the many family canoe trips -- but as part of the Shareholder Meeting in 1981.

Sam succeeded beyond imagination with Walmart. If he were here today, he would be the first to credit our associates with that success. He would simply want to say thank you. So, to all who have been part of this amazing story -- especially our 2.3 million associates in 28 countries around the world -- thank you. Thank you for making the difference every day.

At Walmart, we have a lot to celebrate. There’s no question that our company is moving in the right direction. We’ve demonstrated this with 11 consecutive quarters of positive comp sales growth in the U.S. and strong performance at Sam’s, International and especially e-commerce. In fact, last quarter, we grew our e-commerce business by over 60 percent!

As encouraging as our results have been, there’s nothing we love more than hearing good things from our customers. Recently, I was copied on a great customer email about the progress we’re making online, and I thought I’d share it with you today. The subject is: “Now shopping on Walmart.com.”

“I am so glad you nudged me to switch to Walmart.com. In the past, I had tried Walmart.com but always went back to (that other website) because it just seemed easier. Walmart.com is now so great!! Works easily every time, and it has all the items I need. The packages arriving at our door this week have all been from Walmart.com. It has improved so much!!”

Feedback like that is so encouraging, especially when it comes from someone who I know for a fact is a tough customer. You see that email was sent to my wife, Carrie. And it was sent by my mom. I’m not sure what to make of my mom shopping with that other website before. But I do appreciate her honesty and enthusiasm. If Mom says it's true, you know it is!

At Walmart, we have every reason to be encouraged right now. But that doesn’t mean we can get comfortable, be satisfied or slow down. That’s not an option for us. That’s not an option for any retailer in this environment. Here’s a recent headline that says it all -- the “Retail Apocalypse.” And look at that chart. “More than 3,500” store closures just in the early part of 2017.

Walmart is well-positioned for the tectonic changes happening in retail. We invested $2.7 billion to raise wages and improve our training programs. We purchased Jet.com, our largest e-commerce acquisition ever. We expanded our online marketplace by millions of items -- to 50 million -- in the past year alone. Those are big changes, and they’re paying off. We’ve also made lots of smaller changes -- many of them in the stores -- that have improved the customer experience. But it’s still not enough. We have to stay aggressive. We have to be nimble, move fast and take risks -- sometimes big risks. And our ears should perk up when we hear voices that say what we’re trying to achieve can’t be done.

Throughout our history, we’ve proven the skeptics wrong, whether it was bringing discount retailing to small towns, developing state-of-the-art systems and logistics to lower costs, or offering food and general merchandise under one roof in Supercenters. This is who we are. This is what made us great and will drive our success in the future. Sam Walton called it “Swimming Upstream” -- the 10th out of his “10 Rules for Building a Successful Business.” It’s the rule that resonates most with me.

I came across a video recently where he talked about it, and I’d like to play it for you. Sam’s words ring as true today as they did then. Now more than ever, we need to “Swim Upstream.” And we need some of those mavericks. Is this the easy path? Is it the comfortable path? No, it’s much harder, much more strenuous. But it will make us stronger, leaner and better positioned to do the big things -- to once again deliver the future of retail.

Now, swimming upstream doesn’t just apply to our associates and leaders. It also applies to the board. We’ve made significant changes over the past two years to the board’s structure and governance. We’ve deepened our expertise in technology. We’ve optimized the number of seats. And we’ve made several process improvements to be nimbler. We also continue to have strong, independent voices. Seven out of our 11 director nominees are independent. Let me take a few moments to introduce our directors. I’ll first recognize the nine directors, in addition to me, who are up for re-election. I’d like to ask them to stand as I call their names and to keep standing. Please hold your applause to the end.

• Our Lead Independent Director and chairman of the Nominating and Governance Committee, Jim Cash;
• The chair of our Audit Committee, retired KPMG Chairman Tim Flynn;
• Former American Airlines Chairman and CEO Tom Horton;
• Yahoo President and CEO Marissa Mayer;
• Walmart President and CEO Doug McMillon;
• The chair of our Strategic Planning and Finance Committee, former PepsiCo Chairman and CEO Steve Reinemund, who unfortunately couldn't join us today;
• The chair of our Technology eCommerce Committee, Instagram CEO and Co-Founder Kevin Systrom;
• Game Composites, Ltd., CEO Steuart Walton;
• And, of course, my predecessor as chairman of the Board of Directors, Rob Walton.

Thank you all for your willingness to continue to serve. Please be seated. Now, I’m excited to introduce one new independent member who has been nominated to join the board, Carla Harris. Carla is vice chairman at Morgan Stanley. She is actively involved in her community and has been a strong advocate for women in business. In 2013, she was appointed by President Obama to chair the National Women’s Business Council. We will benefit from her deep financial expertise and role as a champion for women. Carla, the board and I look forward to working with you.

Stepping off the board and not standing for re-election are two directors who have made significant contributions to our company. They’ve both been strong advocates for the work we’ve done at Walmart with women’s economic empowerment and our diversity and inclusion programs.

First, Pam Craig is the former CFO of Accenture and had an outstanding 34-year career with the firm. She has brought a global perspective and finance and technology expertise to our board. Pam is leaving us earlier than we would like, but we’ve enjoyed working with her and benefitted from her time with us. Thank you, Pam, for your service.

Linda Wolf is the retired Chairman and CEO of Leo Burnett, a global advertising agency. Linda’s brand management and range of perspectives have benefitted the company tremendously during her 12 years on the board. She has been deeply involved in re-shaping our associate training programs and compensation structures as chair of the Compensation Committee. Linda has also worked closely with our lead independent director and me on many of the changes to the board over the last couple years. Linda, you should be proud of the difference you’ve made for our company. You’ve become a dear friend to all of us, and we will miss you. Thank you.

Our business is moving in the right direction. The changes we’ve made over the past couple of years -- big and small -- are starting to pay off. But we still have a long way to go. So, this is no time to be timid, to slow down, to listen to any voices of doubt. We stay aggressive. We work nimbly, move fast and take risks. And we “Swim Upstream.” Your Board of Directors has tremendous confidence in you -- our associates -- and in our leaders. And just as important, we’re proud of you. So is our Walton family. We thank you for everything you do. Now, let’s set out to do what we’ve done before, and I believe are on our way to doing yet again -- delivering the future of retail. Have a great meeting!