The retail world is changing, not just for smaller brands but also the most powerful conglomerates. Wal-Mart, the American value retailer, is having to adapt its ways of doing business to successfully meet the criteria of the global retail industry and beat competition. Speaking at the World Retail Congress in Barcelona, Jack Shewmaker, director and former chief financial officer at Wal-Mart, questioned whether the company was adapting fast enough: “Wal-Mart needs to change and it is doing so but I’m not sure if it is changing fast enough. If you’ve got the same model as five years ago then you should take a look at it.”
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Unlike when Wal-Mart was controlled by its founder Sam Walton,Shewmaker expressed concern that the company has been under-estimating the competition during recent years: “You need to look at what others do better than you and I think Wal-Mart could do it better. Wal-Mart is getting caught up in newness mode and it then forgets to re-modernise its existing stores and incorporate this in the capex . We should take money from growth and expansion to make sure the existing business is strong. You’ve got to take the capex budget apart to rejuvenate the core business,” suggests Shewmaker.
Another criticism of Wal-Mart has been its record on sustainability where it hasn’t adapted to consumer demand and making ethical changes where feasible. Whilst this is something that Wal-Mart has been focusing much attention, Shewmaker suggests it has made the mistake of not shouting enough about the progress it has made within this area. “The mistake we made was not to tell people what we were doing. Don’t just do good deeds, but tell the whole world what you are doing,” he says.
“The market is challenging and we’ll get through it. Technology and systems change so fast that people are having trouble keeping up with it…but some of your cash flow needs to go into such investment,” he suggests.