People issue key to Wal-Mart future - Editorial

Discount Store News, June 7, 1993 by Tony Lisanti

A little more than a year after the death of Sam Walton, all seems right with the nation's largest retailer.But the same questions that were quietly asked in April 1992 about the future of Wal-Mart continue to be asked. Will the magic wear off? How long will double digit-growth continue?

The list of questions goes on, spurred not only by the national press corps, but by many industry analyst as well.

This special issue of DSN, beginning on page 39, provides some insight and answers to many of those questions. Over 20 stories analyze a variety of topics including the discounter's plans for its new 2000 prototype, private label, plus results from an exclusive consumer study conducted in Stockton, Calif.

But more specifically what does the future hold for Wal-Mart? Conventional wisdom suggests that the growth will continue, but will become increasingly difficult to sustain beyond 1995. Furthermore, there are several critical and sometimes overlooked issues that face the retailer. They include:

* Public Image. A few weeks ago, the town of Hallandale, Fla., voted to raise $15 million to buy some town property in order to prevent Wal-Mart from building a store on the site. Wal-Mart must overcome this negative perception.

* Media Relations. As you may recall, in recent weeks Wal-Mart has taken the brunt of criticism for weak retail sales. Such headlines as "Wal-Mart Stock Tumbles as Investors Wonder If Dip in Sales is Part of a Longer Term Trend" have appeared nationwide. But that's what happens when you're the No. 1 company in the industry. Wal-Mart must manage its external public relations more effectively.

* Internal communications. Wal-Mart must always maintain open communications in all levels of management, particularly between store level and headquarters.

Forget technology and partnership. Forget logistics and distribution. Wal-Mart has mastered those discipline. But these other issues, if not handled properly, could affect the company's most important competitive advantage: its people. These issues could also quickly destroy its image morale, and possibly impact profitability.