A Job to Do: Retail's Role in an American Renewal

Bill Simon, President & CEO, Walmart U.S.
National Retail Federation 102nd Annual Convention & Expo

Speaking at the 2013 National Retail Federation's annual BIG Show, Bill Simon announced Walmart will increase domestic sourcing, help veterans find jobs when they come off active duty, and help part-time associates who want to be full time make that transition

Tuesday, Jan 15, 2013

Remarks as Prepared for Delivery

It’s a pleasure to be with you all this morning.  It’s humbling to be in this hall, and I appreciate this opportunity.

I love that we compete hard every day – and then come together to talk about what we have in common.  I wanted to come to NRF today because America needs an economic renewal.  And, when we work together, our retail industry can lead in a way no other industry can. 

Next week, the President will be inaugurated and, earlier this month, the new Congress was sworn in.  Whether you were happy or unhappy about the way the election turned out, you can’t say much has changed so far.  The new Congress behaves a lot like the old Congress.  The new issues look a lot like the old issues. 

The election clarified for me that it’s time for those of us  outside of politics to get to work.  I find it fascinating that during the campaign we all waited with bated breath each month for the government to tell us how many private sector jobs were created. After all, it’s the private sector that creates jobs.  And the build-up to that jobs report is a symptom of a bigger problem.  We’ve developed a national paralysis that’s driven by all of us waiting for someone else to do something.  

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But if we’re waiting on government, we’re waiting on a process that can’t act with the same speed as business.  I learned this lesson firsthand while I was working for the state of Florida.  As the head of a large agency, I often briefed State Senators in the days before a hearing.  I remember quite vividly a time when I briefed a Senator and showed him my conclusion.  He looked it over, nodded, and said: “You’re right, but I’m going to have to blast you for this tomorrow.”

That doesn’t make sense for someone in business, but I’m sure he had his reasons.  Government is filled with good people – but it’s complex, and the system can sometimes take time.

The beauty of the private sector is that we don’t have to win an election, convince Congress, or pass a bill to do what we think is right.  We can simply move forward, doing what we know how to do, growing our business.

At the heart of our national conversation today is one issue: creating jobs to grow the economy.  My message to you today is that the time for waiting is over.   Fixing this problem will take all of us doing our part – business, government, labor, nonprofits, and private citizens.  And the retail industry has to lead. 

Today I want to talk about three initiatives that Walmart is working on and that we hope can be common ground for our industry.  They come down to this: the opportunities we create through our own jobs; the opportunities we can provide people who need jobs, including our nation’s veterans; and the incredible opportunity we have to support American manufacturing and to create more American manufacturing jobs.

Taking action on the economy is our responsibility as Americans, but it’s also our opportunity as retailers.  The fundamental business question is this: Do we accept that the pie of customer dollars will remain the same each year, and we will compete over our slice of that pie?  Or can we create a bigger pie?  I believe we can break out of the zero-sum paradigm that has been created by the recession. In a stagnant economy, there is a difficult, almost brutal fight for market share with clear winners and losers.  In a growing economy, everyone can be successful.  

I understand that retailers don’t pass laws or make tax policy.  We don’t print money or negotiate trade agreements.  But what I’m saying is really straightforward: There are a lot of big rocks out there that we can start moving. 

We in this room can invest.  We can grow, and we can hire – and we can use the power of what we buy and sell to make a difference.  We can decide to act.  We can decide to lead.  We won’t need to wait on the jobs report each month because we will help write the jobs report.

Let me tell you about the three initiatives we can work on together. 

Supporting Good Retail Jobs

The first is to support good retail jobs, to stand up for those jobs, and to make sure everyone working with us understands the vast career opportunities we offer.  I want to thank the National Retail Federation for the “retail means jobs” campaign.  As NRF has pointed out, 1 in 4 American jobs are supported by our industry.

We’re all tired of retail jobs being put down, as if retail workers can’t judge for themselves what a good job is.  You and I know what our workforce does every day to serve our customers and build better lives for themselves and their families.  In Walmart’s case, half of the country chooses to shop at one of our stores each month.  It takes 1.3 million Walmart associates to deliver what they need.  This is more than a logistical miracle, it is a people-driven success story, every hour of every day, and our associates pull it off.  I couldn’t be more proud of every one of them.  And I know you’re proud of your people too.

There are some fundamental misunderstandings out there about retail jobs, and we need to do better at explaining the opportunities we offer.   You all know that the retail industry offers competitive wages and benefits – and Walmart does too.  In fact, our pay and benefits are in the top half of retail. 

And it’s true that retail has some entry-level jobs; that’s nothing to be ashamed of.  In fact, I think that’s fantastic.  Just about everyone started out in an entry-level job; I did, and I bet you did.  My first job was as a dishwasher in a restaurant for $2.10 an hour.  It wasn’t a great job, but it was a great first job.

I love being a retailer because our industry provides tens of millions of people with hope and opportunity.  For some, retail is a first job and a chance to gain skills to succeed in the workplace.  For others, it’s part time work – students stretching their financial aid, a teacher working over the summer, or seniors supplementing their retirement. 

And today, a job in retail can include benefits I would never have dreamed of in my first job.  Retailers offer health care plans, retirement plans, and training and development opportunities.  At Walmart, we offer hourly store associates quarterly cash bonus opportunities, a health care plan that starts at $17 per pay period, a 401k plan with a company match, a discount on merchandise, and, most of all, a chance to move up through the ranks and build a career.  

Here’s what many people don’t get: entry-level jobs often lead to bigger jobs.  In retail, you can climb the ladder from a stocker or a cashier to a department manager to a store manager and beyond.  Depending on the time of year, there are between 15,000 – 50,000 job postings at Walmart.  In fact, every year at Walmart we promote about 170,000 people to jobs with more responsibility and higher pay.  About 75% of our store management started as hourly associates, and their average pay is between $50,000 and $170,000 a year – similar to what fire fighters, accountants, even doctors make.  The highest earning store manager last year made more than $250,000.  And I know many of you can tell similar stories.

People just want to know how to get there.  At Walmart, we’re working to clarify the opportunities we offer.  As we listen to our associates, we’ve found that in an organization of 1.3 million people, it can be difficult to understand all of the options.  One thing we hear is that some don’t know how to become full time.  And while not every associate currently with us wants a full time position, we understand that some do. 

We are working on some internal changes to help them make that transition.  Ultimately, we want every associate to find the career opportunities they want with Walmart.

As part of that effort, we’ll make sure part-time associates have full visibility into full time job openings in their stores and nearby stores – and that they always have the first shot at those jobs.  We will also bring more transparency to our scheduling system so part-time workers can choose more hours for themselves. 

Everything I’m saying here is built on one conviction: Retail plays a critical role in the economy.  We offer anything you want – from first jobs to meaningful careers.  No matter what you’re looking for in life, retail has a place for you.  And that’s awesome.  Be proud of who we are! 

The NRF is right: retail means jobs.  And I’m proud to stand up for our jobs.

Some people say we don’t offer good jobs.  I say this industry is the greatest engine of opportunity in the United States of America.

Some say a retail career isn’t a meaningful career.  I say that serving our customers is a noble calling that benefits the entire economy.

And some say our industry’s jobs aren’t good for this country.  But I say every retailer in this room is keeping the American dream alive and that deserves to be recognized.

Honoring Our Nation’s Veterans

As we continue to improve, defend, and build new jobs, there’s a very special group of Americans to whom we owe an unpayable debt: our nation’s veterans.  That’s the second effort I want to talk to you about today.  It’s a chance for all of us to work together.

I can think of no better group to lead in revitalizing our economy than those who have served in uniform.  Just think about our history.  After World War I, the doughboys came home, and we had the roar of the 1920s.  After World War II, the GIs led the longest economic boom in our history. 

Today, after ten years of war, there’s a new group of men and women ready to help write the next chapter of American prosperity.  Sadly, too many of those who fought for us abroad now find themselves fighting for jobs at home.  Through their service, veterans give us a land of freedom.  When they return, it must be to a land of possibility. 

Let’s be clear: hiring a veteran can be one of the best decisions any of us can make.  Veterans have a record of performance under pressure.  They’re quick learners, and they’re team players.  These are leaders with discipline, training, and a passion for service.  There is a seriousness and sense of purpose that the military instills, and we need it today more than ever.  We believe Walmart is already the largest private employer of veterans in the country.  And we want to hire more.  

It will take a little time to get the systems in place, but we’re ready to make a commitment today: Beginning Memorial Day, Walmart will offer a job to any honorably discharged veteran within his or her first twelve months off active duty.  Not every returning veteran wants to work in retail.  But every veteran who does will have a place to go.  We project that Walmart will hire more than 100,000 veterans over the next five years. 

Most of these jobs will be in our stores and clubs, and some will be in our distribution centers and Home Office.  They will look different for different people, and of course we’ll hold veterans to the same basic hiring criteria as everyone else.  And we’ll do our very best to place veterans where they want to be.  

Maybe they’re on the GI Bill with kids at home and need a part time job to make ends meet.  Maybe they’re not sure what their next move will be and need something to tide them over.  Or maybe they want a whole new career. 

I take this one personally.  That transition from active duty is such a critical period in your life.  When I came off active duty in the Navy, I needed some time to make decisions.  I ended up in another restaurant job – tending bar – and I can only say a heartfelt thank you to Tommy Condon’s Irish Pub in Charleston, South Carolina.  They gave me nine great months before I went to grad school.  And I’m eternally grateful.

As many of you know, First Lady Michelle Obama and Dr. Jill Biden have been leading a fantastic effort called Joining Forces to serve our nation’s military families.  We have spoken with the White House about our commitment.  The First Lady’s team immediately expressed an interest in working with Walmart and with the entire business community to join forces to build upon this commitment.  In the next several weeks, the White House will convene the Department of Veterans Affairs, the Department of Defense, and major American employers to encourage businesses to make significant commitments to train and employ America’s returning heroes.

Walmart’s pledge isn’t the end of this effort; it’s only the beginning.  I know many of you have your own efforts too.  Just look around this room – and imagine what we could do together.  We could set a goal like slashing the unemployment rate among veterans in half.  We could leave an incredible legacy as an industry.  We can be the ones who step up for our heroes.  And we can do this now.

You won’t regret it.  I’ve seen firsthand how veterans make a company better.  We have veterans like Michelle Caraballo, who served as a captain in the Army and went to Iraq as part of the “surge.”  She became a store manager for us with responsibility for almost 400 associates, and is now in our Home Office helping lead our global workforce management team.  And we have veterans like Chris Sultemeier, a West Point graduate who has risen through our ranks over 20 years of service and now runs all of logistics for us.

Michelle and Chris and others like them have shown us what our men and women in uniform do for America after their military service. Leadership, courage, sacrifice, commitment – these are the qualities of character they bring to every mission they take on.  Michelle isn’t here today but Chris is.  Chris will you please stand – in fact will every veteran here today please stand – and accept our respect, our gratitude, and our thanks.  We won’t let you down.

Driving More American Manufacturing

The final effort I want to ask for your help with is another opportunity to work together.  As an industry, we can create more American jobs by supporting more American manufacturing.

This has to start with a reality check on where we are today.  America is still the biggest manufacturer in the world.  And I know according to urban legend Walmart’s shelves are filled with foreign products.  But the truth may surprise you.  Don’t forget, we run a pretty large grocery business.  According to data from our suppliers, items that are made here, sourced here, or grown here account for about two-thirds of what we spend to buy products at Walmart U.S.  But of course there’s room for more. 

Think about the global landscape today: the economics of manufacturing are changing rapidly.  In previous decades, investment mainly went to Asia.  Wages were low.  The price of oil was low.  And new factories sprung up out of the ground.

But today, some of those investments are nearing the end of their useful lives, and manufacturers are making decisions about where they will invest next.  Meanwhile, labor costs in Asia are rising.  Oil and transportation costs are high and increasingly uncertain.  The equation is changing.  And a few manufacturers have even told Walmart privately that they have defined the “tipping points” at which manufacturing abroad will no longer make sense for them.

Let’s give them the nudge they need.  Through our buying power, we can give manufacturers confidence to invest capital here – and play a role in revitalizing the communities we serve.  These factories will have higher tech jobs than those that left, and these jobs will have ripple effects in their communities.  Factories need raw materials to supply them, trucks to deliver to them, restaurants and – yes – retail to serve them.  And they build up the local tax base.

If we can help create these jobs here, it will make us proud as Americans.  But this is also just good business. For example, it’s crazy that 70% of cotton grown in the US is shipped overseas, spun into products like towels, and then often shipped right back here.  We can cut out two shipments across the world and weeks on the water and cut our costs in the process.  We can save our customers money by employing more of their neighbors – why wouldn’t we do this?

Our Chief Merchandising Officer has told our suppliers that Walmart is ready to meet with them on domestic manufacturing.  And we’re ready to make a strong commitment to move this forward.

Today, I’m proud to announce that Walmart will buy an additional $50 billion in U.S. products over the next ten years – a timeframe that reflects the lead times for bringing facilities online.  We’ve appointed a senior team within Walmart to lead this effort. And we’ve decided we will sign longer-term purchase agreements when it makes sense to give suppliers the certainty to invest here.

Walmart and Sam’s Club will grow U.S. manufacturing on two fronts: by increasing what we already buy here – in categories like sporting goods, apparel basics, storage products, games, and paper products.  And by helping on-shore U.S. production in high potential areas like textiles, furniture, pet supplies, some outdoor categories, and higher end appliances.  These are just a few examples; we’re looking at many more.

I hope many of you will join this effort.  Again, our work is only the start.  We will do $50 billion on our own.  But, as an industry we could set our sights higher.  Let’s drive $500 billion in new purchases over the next ten years.  That’s what an American renewal looks like.

We can do so much more by working as an industry and with government.  I’ve spoken with the incoming chair of the National Governors Association, Governor Mary Fallin of Oklahoma, about how state government and retailers and manufacturers can drive this issue together.  We’ve also spoken with governors like Nikki Haley in South Carolina and Mike Beebe in Arkansas.  These governors are enthusiastic about getting their constituents back to work. 

This summer, we will help convene a manufacturing summit to bring us all together.  And I hope that you will join us.  Instead of working on these issues separately, we will accelerate these changes by working together.

And when we do, it will benefit all of us.  Any new factory…can sell to any of us.  Every investment made in partnership with one of us lowers the cost for all of us.  Every new hire at one of our suppliers is a new customer who might come through your doors or ours.

And here’s the best part: we can just do it.  We can.  We don’t need any new studies or anyone’s permission.  And if we wait for the conditions to go from “good” to “perfect,” then we’ll always just be waiting. 

I want to close with a story that drove home that point for me.

When we first started thinking about this, I sat down with our Senior Vice President of Home, Michelle Gloeckler.  I asked her about opportunities in her category to increase American manufacturing.  She asked around with her suppliers, and she found that a lot of people want this to happen, but no one really knows what to do.  They’re waiting.

But Michelle identified a partner who wanted to lean into this.  They’re a great supplier we’ve worked with for many years: 1888 Mills.   Today, most towels are made overseas – because that’s where towels are made today.  But 1888 Mills also had an underutilized factory in Griffin, Georgia.

On the surface, the numbers looked close.  But when we dug into it, line by line, we could see that – with a couple commitments from us…and a couple innovations and a little capital from them…we could actually change the equation…and the numbers would work.  In fact, they looked pretty good.

So we made a long-term commitment to get this program going.  Today, the factory is hiring again, and the community is thrilled.  The towels will be in 600 of our stores this spring and another 600 stores this fall.  You’ll know them when you see them because they’re called: “Made Here.”  And there is much more to come.

1888 Mills is showing leadership in this area, and Michelle and I are pleased to be joined today by their CEO, Jon Simon, and their Chairman, Douglas Tingle.  

But here’s what gets me: there was nothing inevitable about this.  Everything could have just remained the same.  Instead we decided we could move the rock.  Michelle and 1888 Mills just got it done. 

And that’s what I want to leave you with today: we can just decide to do this.  We can just decide to source more merchandise at home, just as we can decide to promote even more opportunity at home and to hire our veterans as they come home.

We can’t break the gridlock in Washington, but we can break the paralysis of waiting on Washington.  As you work this week at NRF to grow your businesses, I ask you to also think about what we can do together to move the rocks.    

I’m proud to be associated with each of you.  We do compete every day – but it’s with the utmost respect and admiration for each other.  You live our industry every day, and you know the value of what we do.  The retail industry is an industry of hope and opportunity – and we wouldn’t have it any other way.

We’re retailers.  We’re proud of it.  And we can do this.  Thank you.

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