Retailer suppliers convene for latest

Wal-Mart’s Quinn: Past year ‘volatile’

— Wal-Mart supplier representatives from across the region converged on the John Q. Hammons Convention Center on Tuesday morning to hear the latest updates from the world’s largest retailer.

The main speaker at the event was Stephen Quinn, Wal-Mart executive vicepresident and chief marketing officer, himself a former supplier executive with Pepsi-Co’s Frito-Lay NorthAmerican division. Quinn was quick to point out that Sam Walton, Wal-Mart’s founder, was committed to partnerships with suppliers.

“The customer hires us to help them save,” he said.

Quinn’s appearance was the latest in the WalStreet Speaker Series sponsored by the Bentonville-Bella Vista Chamber of Commerce.

The past year at Wal-Mart, Quinn said, has been a “relatively volatile roller coaster” as the retailer rebounded from a string of declines in so-called same-store sales - sales at stores open at least a year, a key measure of performance in retailing.

Now, he said, the business is “calm at the surface” under the leadership of Bill Simon, president and chief executive officer of Wal-Mart U.S.

But the business still faces challenges, he said, because for a majority of its customers, “this recession has never ended.” He described an “hourglass” economy with one group doing well and others still struggling.

Median household income, he said, is below the level of a decade ago. And for many of the company’s customers, he said, living paycheck to paycheck is a challenge.

“For us at Wal-Mart, it’s very personal. We see these customers every day,” he said. Food stamps have become more important to many of the company’s shoppers, he said.

And for some of the company’s shoppers on public assistance, he said, purchases are being made a minutepast midnight on the day their debit cards reload.

Quinn does not expect retail in general to recover to pre-recession levels until sometime next year.

The company brought layaway back, he said, because many customers had become “massively overleveraged.” Layaway allows customers to pay for purchases over time rather than charging purchases on a credit card.

The company also has seen a shift in priorities among customers, he said.

“Local has become more and more important to them, even locally grown,” he said. Customers cited nutritional aspects of locally grown produce, he said, but they also wanted their shopping destination to be a “store of the community” tailoring to local preferences.

The company restocked fishing gear in communities where customers asked for it, he said.

And Wal-Mart’s steak promotion, he said, enjoyed a “phenomenal year.”

Roger Thomas, chief executive officer of Telecomp Inc. in Bentonville, said he attended Tuesday’s session because he “learns somuch.” His company, with 16 employees, provides technology solutions to many of Wal-Mart’s suppliers in the region.

“This information is critically precise here,” he said, and will help him provide services to vendors to “work faster and smarter with Wal-Mart.”

During a question-andanswer session, Quinn said that two years ago, the company had an “allergic reaction” to price rollbacks - or merchandise on sale - and “backed massively away from that.” The company’s business model, he said, is supposed to be everyday low prices.

“I wouldn’t expect there’s a big rollback program coming,” he said.

Wal-Mart is exploring ways to get more grocery shoppers over to the general merchandise side of its supercenters, he said, and is “cautiously” looking at how to get a bigger share of coupon activity.

Wal-Mart’s stock closed Tuesday at $69.50, down 41 cents or 0.6 percent, on the New York Stock Exchange. The stock has traded between $57.18 and $77.60 in the past year.

Business, Pages 19 on 11/28/2012

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