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