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Tue November 26, 2013
Wal-Mart's New CEO Is An Insider
Wal-Mart’s new choice to lead the company is longtime Wal-Mart executive Doug McMillon.
He started working at the world’s largest retailer as a summer associate in 1984 and returned in 1990, working his way up the ranks.
McMillon will face a number of challenges, including sluggish growth and accusations that Wal-Mart underpays its workers.
The Wall Street Journal’s Jason Bellini joins Here & Now’s Jeremy Hobson to discuss McMillon and the challenges he’s facing.
JEREMY HOBSON, HOST:
From NPR and WBUR Boston, I'm Jeremy Hobson. It's HERE AND NOW.
Wal-Mart has picked an insider to be its next CEO. Doug McMillon started working in the Wal-Mart warehouse as a summer employee in 1984. He has held a number of executive positions in the U.S. and overseas over the last couple of decades. But he will face a number of challenges as head of the world's largest retailer when he takes over in February.
With us now to discuss is Jason Bellini, reporter with The Wall Street Journal. He's with us every Tuesday. Hi, Jason.
JASON BELLINI: Hi, Jeremy.
HOBSON: Well, first, tell us a little more about Doug McMillon.
BELLINI: Well, he has a 22-year career with the company. And he's really homegrown Wal-Mart talent, which the company likes to do. He started out as a summer associate. He graduated from the University of Arkansas. And he brings plenty of executive experience to his new position. Starting in 2009, he became head of Wal-Mart's international operations. That's 6,300 stores, more than 823,000 employees. And as WSJ's Ben Fox Rubin reports, Wal-Mart's international division has grown sales. That growth has been far outpacing the U.S. division.
HOBSON: And there are a number of challenges ahead. And you mentioned the international side of Wal-Mart. Of course, there is a bribery scandal in Mexico where the company allegedly paid bribes to speed up building permits and gain other favors. Tell us about the challenges ahead for Mr. McMillon.
BELLINI: Well, you're exactly right. And that specific case you're talking about is not pretty. The allegation is that Wal-Mart's Mexican operations bribed officials in Mexico to let them build a Wal-Mart near an ancient pyramid. So that's one of the issues that's going to be resolve because the company needs to need to grow abroad. Now, Rob Walton, the chairman of Wal-Mart's board of directors said, the mission now is to make Wal-Mart - and I'm quoting here - "more global and more unified across all our stores, mobile and online." And it's those last two, mobile and online, where he really has his biggest challenge with huge competitors in that arena.
The Wall Street Journal recently profiled Liz Coddington, the CFO of Wal-Mart.com, and her division's hiring more engineers. They are really trying to use big data to try to understand what's trending in social media. And the company's really doing a lot of experimentation with how to reach out to customers better.
HOBSON: And this is all about competing, I assume, with the world's largest online retailer, which is Amazon?
BELLINI: That's right. Competing with Amazon, big challenge because, you know, right now, they have pretty miniscule sales, relatively speaking, online. But they're trying a lot of different, new things, including, you know, they're quietly matching online retailers' prices when customers ask. They've got a program that allows customers to order merchandise online and pay for it with cash in a store. And then they can, you know, pick it up or have it delivered.
A trade publication called Internet Retail estimates that $4.9 billion or 1 percent of the company's total revenue last year came from online sales. That compares to Amazon.com's $34 billion. So they've got a lot of catching up to do.
HOBSON: Jason, what about the labor issues that have been a big story for Wal-Mart recently? The company being charged with providing wages that are so low that, in some cases, its employees have to have food drives for themselves.
BELLINI: Well, you know, among the allegations is that stores in 13 states unlawfully threatened, disciplined or terminated employees for participating in legally protected strikes and protests. Now, Wal-Mart maintains its actions were legal and justified. And the retailer has pushed back Friday sales earlier this year, and that's also sort of backlash among some workers. So, yeah, labor issues are going to be a major issue going forward for this company and for this new CEO.
HOBSON: Jason Bellini, reporter with The Wall Street Journal, thanks as always.
BELLINI: Thank you.
HOBSON: You're listening to HERE AND NOW. Transcript provided by NPR, Copyright NPR.