BENTONVILLE, Ark. — Wal-Mart Stores' executive shuffle last week is expected to bring an increased focus on operations to the U.S. business, industry observers told SN last week.
The company shifted the longtime leader of its U.S. business, Eduardo Castro-Wright, to be president and chief executive officer of its global sourcing and online operations, and elevated Bill Simon to be president and chief executive officer of Walmart U.S.
The move will allow Castro-Wright, who remains vice chairman, to relocate to California to be “closer to his family during his wife's illness,” said Mike Duke, president and CEO, Wal-Mart, in a prepared statement. Wal-Mart's Global.com and Global Sourcing divisions, which will be led by Castro-Wright, are based in California.
In a memo to employees, Castro-Wright explained that his wife, Fabiola, is recovering from a heart transplant.
Simon, a retired Navy officer, joined Wal-Mart in 2006 and most recently had been chief operating officer at Walmart U.S. Before joining Wal-Mart, he was senior vice president of global business development at restaurant company Brinker International, and before that was with the Florida Department of Management Services.
“Bill is a strong leader who has made a positive difference from his first day at Walmart,” said Duke, noting that he “transformed the customer experience at Walmart through faster service, a friendlier shopping environment and cleaner stores” and also helped develop and launch the company's $4 prescription drug program. “He is a talented strategist and an excellent people manager with strong execution skills.”
Simon had already gained much more control over Wal-Mart's U.S. operations in a management reshuffle in January, noted Leon Nicholas, director of retail insight at the Cambridge, Mass., office of Kantar Retail.
“Simon is an operations guy, so what we are expecting here is a more laser-like focus on their operational core,” he told SN last week.
He said he expects that the company will continue to refine — but not abandon — its Project Impact initiative, which has involved merchandising and assortment changes. The company has recently reversed itself on some of those changes, bringing back some slower-moving grocery items and re-deploying promotional pallets, for example, as comparable-store sales have slipped for the last four quarters.
“With Project Impact, they had drifted a little more toward the marketing side of things,” Nicholas said. “With Simon's ascent, you will see them focusing more on operating performance, which means a greater focus on in-store inventory levels, and much, much closer attention paid to the balance of clean floors vs. optimal promotional stocking.”
He also said the company could focus more on store clusters and “localization efforts” under Simon.
Simon's focus has been on “price, assortment and traffic,” Nicholas pointed out. “Those seem to be his three areas of priority.”
Another industry observer, who asked not to be identified, said Simon's military experience indicates that he is very “organizational, structurally focused” executive. “He'll get the right team in place,” the observer said.
Nicholas noted that Simon's selection of a chief operating officer to succeed him could be an indicator of Wal-Mart's direction. An executive from the company's Latin American operations, for example, could signal increased focus on Hispanic or small-format stores, he said.
Nicholas and others pointed out that Castro-Wright's move was apparently unrelated to his performance, and was made precisely for the reasons Wal-Mart outlined.
“He is very well-liked by people there, including the board,” said one observer.
