walmart u.s. · multi-channel strategy leveraging existing assets . ... driving the productivity...

Walmart U.S. Today’s speakers

1

Duncan Mac Naughton EVP, Chief Merchandising

and Marketing Officer

Gisel Ruiz EVP, Chief Operating

Officer

Bill Simon President and CEO

2

The strategy is working Strong progress over the last 12 months

Market share-driven real estate strategy

Merchandising improvements

Price investment through productivity improvements

Multi-channel strategy leveraging existing assets

Strong 1st half sales and profit

3

Consistent Comp Growth

Strong Financial Performance

Strategic Initiatives

Seasonal Execution

Balanced Growth

Note: Comps are on a 4-5-4 basis for the 26-week period ending July 27, 2012

Sales Growth

Operating Income

+4.8%

+6.6% ~$6.1B

Sales Comp

Traffic Comp +2.4%

+0.7% ~$3.0B

Leveraging expenses and investing in price

4

Walmart U.S. Gross Margin and SG&A as Percentage of Sales

On course to invest

$2B by end of FY14

04 05 06 07 08 09 10 11 12 13

Gross Margin

SG&A

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

5

Well-positioned for success

Market share-driven real estate strategy

Driving the productivity loop

Executing our merchandise strategy

Redefining seamless access for our customers

Executing our merchandise strategy

6

Note: Comps are on a 4-5-4 basis for the 26-week period ending July 27, 2012

*Source: Nielsen, for the 26-week period ending September 15, 2012. Share gains represent food, consumables, and H&W (OTC) only

EDLP

Broad and local

assortment

+ 0.7% ~24M more transactions

Market share

Traffic

+ 70 bps*

EDLP is the cornerstone

7

Committed to

basket savings

Never knowingly

get beaten

Ad match defends

against promotions

Basket challenge

localizes message

Book ends

Relevant brands

Local assortment

Basics destination

Delivering a broad, localized assortment

9

Gro

ce

ry

Ge

ne

ral M

erc

ha

nd

ise

Hunting

24.8%

General merchandise capitalizing on positive

store traffic

10

Underwear

9.8%

Sheets

8.8%

General Sports

5.6% General

Merchandise

Note: Comps are on a 4-5-4 basis for the 26-week period ending July 27, 2012

Microwaves

14.8%

Consumer insights driving key strategies

11

Dollar share U.S. food example

Juices Fish

Food

Dry grocery

Frozen

Poultry

Sharpening prices Performance lens Refining assortment

Expanding service offerings

12

Pharmacy

partnerships

Screenings /

immunizations

Providing solutions Pharmacy partnerships

Healt

h

Fin

an

cia

l

Driving cost of goods efficiencies

13

Reducing cost Partnering with suppliers Increasing flexibility

Upstreaming Global sourcing Onshoring Joint planning

Production Retail

Confident about the back half!

14

Aug

Strong BTS season

Sept Oct Nov Dec Jan

Deep on the items that matter

15

Search Mobile Social Digital Catalog FSIs Circular Radio Television Multicultural

Number one share of voice

16

17

Social media for real time messaging

Over 2 billion

holiday

impressions

19

Well-positioned for success

Market share-driven real estate strategy

Driving the productivity loop

Executing our merchandise strategy

Redefining seamless access for our customers

Disciplined focus on the productivity loop Efficiency improvements in all areas of the business

20

Backroom

Sales floor

Front end

Store operations

Distribution centers

Transportation fleet

Supply chain

Sourcing

Greater than 80% of hourly associates received bonuses

Notes: Bonuses as of Q1 and Q2 of FY13; Promotion data applies to the last four quarters; Benefits based on current enrollment.

Over 162,000 Associate promotions

21

Associate engagement is even stronger

Over 1,000,000 associates and family

members covered by healthcare plans Comprehensive affordable healthcare at $17 a paycheck

5,000,000 applications Received last year

Customer satisfaction continuing to increase

Source: Internal customer satisfaction survey

Customer Satisfaction

Scorecard

Fast service

Merchandise

Price value

22

FY13 YTD scores highest in 4+ years

Significant leverage upside exists

23

Front end Backroom Sales floor

24

From auditing 1,200 key items… …to tracking OSA

for the entire sales floor

On-shelf availability (OSA) enhancements

increasing productivity and sales

Store 1 Store 2 Store 3

12:00am 12:00am

Time

How OSA 2.0 works…

25

Example: Hourly sales of Tide in 3 similar stores

An alert will be sent to

Store 1 to stock product

Best in class supply chain productivity

26

Note: Distribution Centers also service Sam’s Club & Dotcom

» 400+ new stores opened

» Added over $25B in sales

» No new distribution centers

In the past 6 years…

Asset

productivity

FY13E

DCs owned & operated by WMT

Leverage

FY08

Best in class supply chain productivity

27

Note: Distribution Centers also service Sam’s Club & Dotcom; *Actual/Estimated savings for a 3-year time frame (from FY11-FY13E)

Fleet

productivity

Miles

FY11 FY12 FY13E

Leverage

Savings:

~$120M*

Asset

productivity

FY13E

DCs owned & operated by WMT

Leverage

FY08

Sustainability initiatives driving cost savings

28

Solar projects Fuel cells Wind energy Zero waste

Over $150M benefit to the bottom line in FY13E

29

Well-positioned for success

Market share-driven real estate strategy

Driving the productivity loop

Executing our merchandise strategy

Redefining seamless access for our customers

Providing seamless access

30

Setting the foundation…

…current generation of multichannel

in-store mode store fulfillment

as soon as today site to store

pay with cash

Improving the customer experience

31

Creating relevant, personalized customer experience

that builds loyalty

polaris search scan & go digital ads

32

Launching same day delivery

SF / San

Jose

Minneapolis

Philadelphia

DC area

Same day delivery

test markets

33

Well-positioned for success

Market share-driven real estate strategy

Driving the productivity loop

Executing our merchandise strategy

Redefining seamless access for our customers

Market share-driven real estate strategy

34

Focus on capital efficiency

Grow supercenters

in core markets

Accelerate small

formats

Delivering more stores through capital

efficiency

35

»Location strategy

»Reduce change orders & fees

»Eliminate elaborate exteriors and

interiors when possible

» Innovation

Drivers of lower cost

FY14 FY15 FY16

Development costs

Growing share with supercenters

36

Supercenters » Continued strong returns

» Substantial growth opportunities

» Focus on core markets

FY12A FY13E FY14E

~125 ~125 122

Unit counts

Supercenters remain primary growth vehicle

37

Core markets for

supercenter growth

Ma

rke

t S

hare

Store Profit Contribution

Core

markets

» Markets with above-average market

share and profitability

WMT small formats offer competitive advantage

38

Channel

Low

Prices

Fresh

Food Pharmacy

Quality

Perception

Dotcom

Capability

Dollar

Drug

Hard

Discount

Regional

Grocery

WMT Small

Formats

Small formats provide flexibility

39

Dollar channel Drug channel Regional grocers

Competes with:

Size

Capital

Sales

40

Walmart Express

» 12 stores by end of FY13

» First half FY13 sales above plan

» Continuing to apply learnings

» Store density test under way

Express

500+ Neighborhood Markets by FY16 Representing ~$10B in sales

41

Neighborhood Markets

Note: Comps are on a 4-5-4 basis for the 26-week period ending July 27, 2012

» Over 240 stores by end of FY13

» FY13 first half comp ~ 5.0%

» Opportunity to further accelerate

FY11A FY12A FY13E FY14E

~700

Robust pipeline in place

42

Small Formats Annual New Square Footage (000s)

~3,000

~4,000

~40

Walmart U.S. FY13/FY14 capital update

43

CapEx Detail FY12

Actual

FY13

Estimate

FY14

Projection

New Stores $3.5 $4.1 - $4.3 $4.0 - $4.2

Remodels $1.3 $0.7 - $0.8 $0.6 - $0.7

Logistics $0.6 $0.6 - $0.7 $0.4 - $0.5

Other $0.8 $0.6 - $0.7 $0.5 - $0.6

Total Walmart U.S. $6.2 $6.0 – $6.5 $5.5 – $6.0

Total Walmart U.S. Unit Growth* 149 ~205 ~220 – 240

Additional Walmart U.S. Sq. Ft. 9.6M 14M – 15M 15M – 17M

($ in billions)

*Includes Supercenters, Discount Stores, and Small Formats

44

Walmart U.S. key takeaways

Disciplined capital efficiency

Executing our merchandise strategy

Accelerating small format rollout

Driving the productivity loop

Redefining seamless access for our customers

Ready and excited about Q4