June 6, 2014

Walmart Shareholders Meeting 2014

Remarks as Prepared for Doug McMillon

Our People

William, I wanted to start with your story because you really went above and beyond for a customer. That is exactly what we're looking for. Thank you!

William represents what makes Walmart successful. It's our people. I've visited with so many of our associates around the world. And the thing that sticks with me is the pride you take in doing a good job. The care you take in serving our customers and in working together as a team.


This company has always been about our people. And it always will be.

My first Shareholders experience was in 1984. It was my very first day with Walmart, and, though I'd been hired to pick orders and load trailers in warehouse 2, they grabbed a few of the rookies and had us decorate the high school gym for the big meeting. And I thought that meeting was big.

I got to watch Sam lead several Shareholders meetings over the years. What I remember is his enthusiasm, his passion for this business, and his love for our associates.

I learned from listening to him, and to Helen, what Walmart stands for. I saw him jump on stage before the meeting was supposed to start and just wing it. Well, we're a bit more buttoned up today but that passion is still here.

I've also learned about Walmart from Rob Walton, David Glass, Don Soderquist, Lee Scott, Mike Duke and countless other leaders. Some of them are here, and I'd like to ask our alumni to stand.  Thank you all for what you helped to build. We won't let you down.

David Glass followed Sam Walton, and under his leadership we scaled up Supercenters and moved beyond the United States. He led us to incredible expansion and set the stage for more.

Lee Scott helped lead the company through amazing growth.  He has been part of Walmart for 35 years and set us on a path toward becoming more sustainable.

And Mike, well, we should all be more like Mike: his strength of character, his ability to be a servant leader. Mike moved this company forward in the right way. He's leaving it stronger, more global, more focused on technology and the digital age. Thank you, Mike.

Our Foundation
So, where are we today? More than 2 million associates. Just over 250 million customers a week.  27 countries. Multiple store formats and brands, and a host of ecommerce capabilities. And we're growing.

Over the last three years we've grown sales by $55 billion. We added $7.5 billion in net sales last year ... and 33 million square feet of retail space. We generated more than $10 billion in free cash flow.

This growth has allowed us to return more than $100 billion to our shareholders over the last 10 years. It's a record we are very proud of.

The foundation of our company is strong. We have dedicated, talented, and creative people, and we have the resources to become even stronger.

Our Future
So, where do we go from here? I am excited about our future. There are so many new ways emerging to serve customers. Technology, data and information are opening new doors for us to lead through.

Our purpose of saving people money will always be relevant, but we'll do it in new ways.

A few core principles will guide our direction:

First, we will be a customer-driven company. We've always said the customer is our boss ...and we'll make decisions based on how we can serve them better.

Second, we will invest in our people. As we change and grow, it will be our associates who will make the difference.

Finally, we need to be at the forefront of innovation and technology. We will lead with urgency to get ahead of change.

With that as our foundation our plan is taking shape. We can think about it in three parts: now, new, and always. We need to get better at what we're already doing now. We also need to invent the new – to bring together the digital world of ecommerce with the physical world of our stores. And we will always stay true to Walmart's purpose and values. 

Running Better Stores Now
Let's start with now. Every single one of us has a role to play in getting better right here, right now, today.

It's pretty straightforward – we need stores that customers want to shop... with merchandise they want to buy. Price leadership. Strong in stock. Friendly customer service. Compelling merchandise. Items that surprise and delight. Merchandise that is presented aggressively.

When we're at our best, the features in our stores anticipate what our customers want and need. They don't need a shopping list. They come in for basics, but they leave with new cushions for their patio set or a great new pair of shorts for summer. And they love doing it. It's fun! We must be stronger merchants, and we will work together to make it happen.

Developing New Capabilities
We will also develop new capabilities to serve customers in new ways. It is important that we all understand the shift that has happened in technology and retail, what it means for us, and what we're doing to win.

Let's start with a little show-and-tell. Think about the smart phone. It organizes our lives and rarely leaves our side. The best smartphones have 80,000 times as much processing power as the Apollo Guidance Computer that took Neil Armstrong and Buzz Aldrin to the moon.

Mobile has changed everything. People now spend more time on digital devices than they do watching TV. A lot of times, they're doing both at the same time.

At Walmart, we now get more ecommerce traffic in the U.S. from mobile devices than from desktop and laptop computers. And, increasingly, our customers will do their grocery shopping on their phone or tablet in their spare time, not during their precious family time. We're going to make that possible.

Now, what do you see?

This is a picture of one of our pick up points at a subway station in London where customers can collect items that they ordered. It may look like any other truck. But it offers access to 26,000 items today and who knows how many items and services tomorrow. This is just one example of the integration of digital and physical retail. Their device, our stores, and this new pick-up point. 

You're familiar with megabytes and gigabytes and maybe even terabytes? Well, Walmart now has about 30 petabytes of shopping information. What on earth is a petabyte? One petabyte of digital music would play for 2,000 years. It's a lot.

For years, our data has helped us run our stores around the world. Now, it is helping us personalize the shopping experience in ways that let us serve customers even better.

Let's look even further ahead. I'm sure you've heard of 3D printing. We've had some fun in the U.S. and the U.K. printing items for customers. Mostly, we've printed little mini-me's – small statues of themselves.

We can easily imagine a day when we can print small household items or replacement parts in a store or a DC. We can begin to envision a whole new way of delivering customized products to customers when and how they need them.

And, finally, think about this, associates starting with us today as teenagers have never known a world without the internet and mobile phones. Do you think they have new expectations for Walmart?

My point is that there's a lot of innovation and opportunity available to us. Customers will increasingly expect and require the best of both worlds. They want the excitement and the immediacy of shopping in a physical store and the freedom to shop whenever, however and wherever they want – to receive their merchandise the way they want. They want an experience that seamlessly adapts to their life.

All of this change is a good thing for us. Walmart can bring together our stores with new digital commerce capabilities to help customers save money, save time, and have access to what they want and need.

The opportunity is enormous. It feels like it's only limited by our imaginations.

Here's what our future may look like:

Our stores, 11,000 and growing, will provide access and convenience. If you need it right here, right now, we've got it. We will run great stores and clubs with great associates. You are our competitive advantage.

We'll keep adding services and pick-up points to our stores to become even more convenient.

We'll also strive to have collection points wherever our customers want us to be. Not only are we testing in tube stations in London but inside train cars in Toronto. Maybe someday we'll be near a school in Dallas, where a mom or dad is picking up their kids.

We've also seen the demand for food delivery, in places like the U.K., Mexico, and China. I recently visited our grocery delivery test in Denver. One of our customers described it like this. "It is like 'grocery fairies' suddenly arrived to make life easier for a busy Mom." "Grocery fairies"… I love that.

And of course, we'll keep improving our traditional ecommerce offering of ordering online and shipping to customers' homes.

To do all of this, we need to move – fast.

That's why we're piloting so many ideas around the world.

That's why we formed @WalmartLabs, hired more than 2,500 engineers, programmers and data scientists, and acquired 14 companies in the last three years. We recently became interested in a product search firm called Adchemy and bought it less than 3 months later. We focused on a wireless services provider named Simplexity and completed a deal 7 weeks later.

We can move fast. Walmart is picking up the pace of change to serve the customer better.

We're also building out our global fulfillment and replenishment network so we can get even closer to our customers. We're rolling out a new Global Technology Platform to provide a better customer experience on all devices.

And to bring all of this to life, we're investing in our people. I'm proud of the jobs and opportunities we offer, and we can do an even better job of creating opportunities to learn and grow. We'll prepare our associates to serve customers better, while building the careers you want at Walmart.  I'm excited about the work underway in Walmart U.S. because it is a critical part of our future.

So this is what real-time change looks like.

 We will grow our same store sales, and we will grow with these new services, capabilities and locations to drive the top line. Customers will be able to access us through our stores and through their phones, tablets, websites and whatever comes next. Walmart will exceed their expectations!

Walmart, Always
Finally, let's talk about always – the things that are constant.

I'll start with our purpose. We save people money so they can live better. This is a noble pursuit.  It's real. We help parents afford new clothes for school, put healthier meals on the table, and save for their child's education or a rainy day.

Our values won't change. Integrity, Service, Respect and Excellence. These are our guiding beliefs, and our behaviors will support those beliefs. Our culture is what makes us special. It's what makes us different. We must nurture it and reward those who live it.

And, as it relates to integrity, we are committed to conducting business in an ethical manner. Integrity is at the heart of everything we do. It's supported by our culture and the world class compliance and ethics capabilities we continue to strengthen. Doing the right thing, the right way, is the only way for us.

But we don't stop there.

We believe in Walmart's responsibility to lead on big issues, in big ways. It's one of the reasons many of us love being part of Walmart.

About 10 years ago, we began to understand that we could make a larger difference in the area of social and environmental sustainability. That period of learning was the beginning of a new era for us, and it really changed my personal perspective.

Ultimately, creating a more sustainable company is about people. It's about our customers, our associates, our kids and grandkids. We care about not only our own associates but also about the farmers and factory workers who make it possible for us to sell merchandise. We care about how they are treated and compensated. That's why we're investing to support additional training and safety.

We're focused, for example, on women. We're on track to help train 1 million women on farms and in factories, in technology, retail, and throughout the workforce. And we're ahead of schedule on sourcing $20 billion from women-owned businesses. 

We'll also keep giving back in the communities we serve – whether that's through disaster relief or local manufacturing around the world or the millions of hours our associates volunteer each year.

As it relates to the environment, we've made terrific progress against our three big goals – to run on 100% renewable energy, to create zero waste, and to sell products that sustain people and the planet. I believe in those goals – as an associate and as a dad.

There are so many ways that Walmart can make a difference around the world. We're committed to doing just that. We will strengthen the trust we've established with customers and the communities we serve.

Closing
I want to close by speaking directly and personally to every Walmart associate. To every associate in this room. To every associate on the sales floor, the back room or in a DC. To every associate writing code or hauling freight.

I want you to feel the same excitement that I feel. I want you to see the same possibilities that I see. I want you to know in your heart, like I do, that our future is bright. We have the foundation and the people, and we know how we're going to win. 

I know it's easy to look at everything that's going on and wonder what Sam would think about things like mobile apps, grocery delivery, or 3D printing.

So I'll leave you with a few words from Sam himself. He said:

"I've made it my own personal mission to ensure that constant change is a vital part of the Walmart culture itself. I've forced change sometimes for change's sake alone at every turn in our company's development. In fact, I think one of the greatest strengths of Walmart's ingrained culture is the ability to drop everything and turn on a dime."

Turn on a dime!

So what would Sam say about our opportunity? He'd say: go! He might even say: hurry up!

We won't let him down. Thank you.