11/7/2015

McCombs Fall Case Competition Redefining the future of grocery retail

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About us

Alex Finley

Corporate Strategy

Alex.Finley@walmart.com

Bora Manellari

Finance and Reporting

Global eCommerce

bmanellari@walmart.com

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Agenda

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Walmart -Overview

4 Case Competition Prompt

Walmart U.S. Strategy

3 Walmart U.S. Grocery business

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Walmart by the numbers

260 Million 11 eCommerce websites customers per week

63 operating banners

$485 Billion in revenue

11,500+ stores around the globe

28 operating countries

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Our global footprint

* Store count as of July 31, 2015

Canada – 395

Mexico – 2,303

Brazil – 559

Chile – 388

Argentina – 108

Central America – 692

UK – 614

China – 416

India – 20

Japan – 356

Africa – 403

US – Walmart 4,588

Sam’s 651

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Our businesses

Geography: US

Net Sales: $58B

Clubs: 647

Associates: ~110K

Last year, we more than doubled

our organic portfolio

Geography: US

Net Sales: $288B

Stores: 4,516

Associates: ~1.2M

Over the past two years, we’ve hired over

80K veterans

Geography: 11 countries

Net Sales: $12.2B

We increased walmart.com assortment

60% in FY15 (to 8M items)

Geography: 27 countries

Net Sales: $141B

Stores: 6,290

Associates: ~800K

Last year, ASDA doubled its

click & collect sites

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Our businesses

Geography: US

Net Sales: $58B

Clubs: 647

Associates: ~110K

Last year, we more than doubled

our organic portfolio

Geography: US

Net Sales: $288B

Stores: 4,516

Associates: ~1.2M

Over the past two years, we’ve hired over

80K veterans

Geography: 11 countries

Net Sales: $12.2B

We increased walmart.com assortment

60% in FY15 (to 8M items)

Geography: 27 countries

Net Sales: $141B

Stores: 6,290

Associates: ~800K

Last year, ASDA doubled its

click & collect sites

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Walmart U.S. – our ambition

Regain share and lead in the next generation of retail

Competing on price alone is no longer enough

We must fix the core and invest for the future

Assortment

and Price Experience Access

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Improving experience by running better stores

Return to service basics

Strengthen partnerships with Associates Improve store operating model

• Added department manager

positions

• Aligning store incentives to

support service basics

• Starting wages increased

• More choice in scheduling

• Enhanced training and

development

Fast Friendly Clean In-stock

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Focus on improving Fresh and ensuring store and online

strategies best serve customers

Optimize assortment depth and breadth while helping

stores run as efficiently as possible

Utilize improved tools and capabilities to effectively deliver

EDLP with consistent execution across the business

Improving assortment

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We have a history of innovation

Discount

retail Grocery

International

eCommerce

Wholesale Omni-channel

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International

eCommerce

Wholesale Omni-channel

We have a history of innovation

Discount

retail Grocery

• Focus on fresh

• Improve private brands

• Enhance convenience

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• Assortment

• Execution

• Processes

• Supply chain

Win in Fresh

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Organics

Win in Fresh

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Private Brands

• Building customer loyalty

• Compete against hard discounters

• Complement to national brands

• Increase market penetration

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Convenience

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Online Grocery

Creating a Seamless

Shopping Experience

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Pickup

Creating a Seamless

Shopping Experience

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“Convenient”

“Fast”

“Free” “I was in and out.”

“Easy”

Pickup

Creating a Seamless Shopping Experience

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Innovating to provide access anytime, anywhere

Expanding eCommerce to

grocery

Integrating mobile into our

stores and clubs

“Reinventing” the

supercenter

11/7/2015

McCombs Fall Case Competition Redefining the future of grocery retail

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Case challenge prompt 2015: Grocery competition

in Walmart U.S.

• Situation

‒ The grocery industry is quickly evolving in order to meet customer demands. Retailers are challenged to find ways to stay relevant and engaged with customers locally, through convenience, quality, and assortment, while maintaining a competitive pricing strategy.

• Complication:

‒ Competitors have been quickly innovating and stealing share from Walmart

‒ Walmart faces pressure from deep discounters, e.g., Aldi, as well as, retailers offering more premium and convenient options

• Question:

‒ What actions should Walmart take to better compete and remain competitive in the long-term with a local grocery competitor (e.g. HEB, Whole Foods, Randall’s, Sprouts Famers Market)? Pick one

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Thought starters:

• What is Walmart’s value proposition and brand? How can we better compete while

remaining true and reinforcing this position and brand?

• Who is our customer, and how do we increase both share of wallet and share of

market, i.e., growing with our existing base while simultaneously attracting new

customers? Be sure to fully understand our customer dynamics, it might be different

than you think.

• Why do customers choose to shop at this competitor over Walmart? (How is this

competitor creating loyalty?) How can we appeal to this customer need while keeping in

mind the above questions? Are there adjacent products/services we should consider?

• Are there any current Walmart initiatives that we should accelerate or improve upon? If

so, how? Conversely, are there any current Walmart initiatives that we should stop?

• How should we prioritize any new initiatives or programs you propose?

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Q A