November 26, 2014
Merchandising chief leaving Walmart
The management changes keep coming at Walmart. The latest, announced right before the chain heads into the critical holiday selling season, is that Duncan Mac Naughton, chief merchandising officer at the company, is leaving to pursue other opportunities.
Mr. Mac Naugthon’s departure follows former Walmart U.S. president and CEO Bill Simon’s in July. It was once thought Mr. Mac Naughton might succeed Mr. Simon, but that notion was quashed when Walmart Stores CEO Doug McMillon chose Greg Foran, a 35-year retail industry veteran who had been running the company’s business in China since 2012, to lead the U.S. business.
According to reports, Mr. Foran has decided not to hire an executive to replace Mr. Mac Naughton. Instead he plans to have executives in key areas such as apparel, general merchandise and grocery report to him directly. Mr. Foran, according to the report, is looking to take a more active approach when it comes to merchandising.
Walmart also announced an executive switch within its U.S. grocery operations. Jack Sinclair, who has headed up Walmart’s grocery organization, is being moved to another role within the company and being replaced by Steve Bratspies, who ran Walmart’s general merchandise division.
Mr. Sinclair appears to be the victim of the chain’s struggles to improve its grocery performance. While Walmart is the largest grocer in the U.S., it has experienced problems, particularly in fresh foods. An unhappy manager, reportedly frustrated with a lack of staff at one of the company’s stores, recently leaked an "urgent agenda memo" to The New York Times. The memo instructed managers to discount meat and baked goods nearing their expiration dates, as well as to remove expired items and place new stock in the backs of coolers.
After seven straight quarters of declining same-store sales, Walmart recently reported a gain, 0.5 percent, despite lower customer traffic numbers. The holiday selling season is seen as particularly critical for the company, which led by Mr. Mac Naughton, made the decision to move away from the one-day events used in the past to five-day events this year.
"Black Friday is no longer about waking up at the crack of dawn to stand in long lines and hope for the best. At Walmart, it has become a family shopping tradition where everyone shops at some point throughout the weekend," Mr. Mac Naughton said recently.
- Wal-Mart Says Merchandising Chief Mac Naughton Leaving – Bloomberg News
- Mac Naughton Exits Wal-Mart, bio removed from website – The City Wire
- Wal-Mart’s Chief Merchant Leaves – The Wall Street Journal (sub. required)
- Simon out, Foran in as new Walmart U.S. CEO – RetailWire
- Can Walmart stop its downward spiral in grocery? – RetailWire
- Walmart turns Black Friday into a five-day event – RetailWire
BrainTrust
Recent Discussions
Discussion Questions
What is your reaction to the latest personnel moves at Walmart? What part, if any, has Walmart’s management structure played in its struggles in recent years?
Poll
Hey, if it is good for the shoppers then it was a good move. The press and anti-Walmart people (the ones who say, “Oh, I don’t shop at Walmart”) thrive on any press that relates to Walmart changes. They just do not like successful retailers that have grown so large on simple Sam Walton principles.
If you were a retailer the size of Walmart and had to change so fast to keep up with today’s faster-changing shopper you would have changes like this too.
So ignore the noise and shop Walmart. Lots of people with BMW 700s and Mercedes and Porsche vehicles shop at the Walmart near me. They know that a better price for the same product is shopper smart.
Oh, for some rookies. When a person leaves a company it is normal to remove his or her bio from the website. The City Wire publication needs to learn more on digital standards.
Boy, what a telling statement about Black Friday. Tone deaf is a phrase that comes to mind.
I think Walmart’s management team was a bit complacent and equated size with trajectory. I like the idea of separate heads reporting to the CEO. As long as there aren’t 12 of them. The merchandise and reputation is stymieing potential growth.
The timing is pretty awful from a stock market perspective. I suppose it kind of gives Walmart a built in excuse for a lackluster Q4.
Shaking things up is a good idea. No doubt about it. It’s the timing that’s odd.
The change in management personnel appears similar to the changes in strategic direction. Walmart’s laser focus on operational efficiency and strategic management focus on low prices always are a thing of the past.
For literally decades now some of us have said that Walmart’s biggest challenge will be the problem of achieving exponential growth in markets they essentially dominate. The need for growth at any cost has sent the chain down some very scary retail rabbit holes with (what should have clearly been) predictably mediocre results.
So, what do you do when you are as big as you can logically get? Blame people, of course. It’s a kind of shell game for analysts. The hands move so quickly they seem to blur, the magic formula for growth aka finding the hero, appears and disappears and the audience— so bedazzled by the performance—completely forgets it’s a simple street con.
Changing bodies or org charts doesn’t begin to address the real problem—continuous growth may not be a) profitable, b) desirable or c) all of the above.
I remember many years ago when as a very young reporter I interviewed an executive from Gerber which then had something like a 70 percent share of the baby food market. “Could you get more?” I asked. “Sure,” he said, “but it would cost us more to gain three percentage points of share than it did do achieve the first 70, so what’s the point? It would be bad business.”
Smart thinking except when you are a public company whose rating and stock price depend on impressing analysts who don’t have—and probably never had—responsibility for a bottom line.
Sure, you need the right people in the right positions. But you also need to have realistic goals. My bet? There will be more heads rolling and more restructuring in the months and years to come. And by the way, they won’t have any significant impact on Walmart’s fortunes, one way or the other.
Sadly, this is the way of our world.
Lots of changes at Walmart. So they are shuffling the deck chairs and taking out a layer to be closer to the front lines. It takes a lot to change the direction of gigantic steam ship. I hope these changes bode well for them.
I can’t help wondering whether this move was related to the leaked memo about management of the produce area—which was probably more of an operations issue than a merchandising problem. Until Walmart gets its arms around these kinds of execution problems, it’s probably unfair to expect a chief merchant to be the center of the turnaround effort.
Trying to make something work is what executive management is employed to do. This is especially true for 21st century new business development as well as being engaged with a hostile economy for nearly a decade. Time constraints are enormous due to minimized staffing making every minute count as if it were an hour. Managing time to the extent that market feedback from front-line managers is overlooked, or even blatantly omitted, in favor of the execution of a plan in trouble is the formula for disasters like we have here.
But what is the root cause for this disaster which is showing up in an alarming number of companies that are either struggling or now gone? I keep seeing a trail pointing to reductions in recruiting staff, sales and marketing staff and corporate training tools. One of the first signs that a company is headed for trouble as a result of these department reductions is the entrenchment of selling price and allowing it to become a long-term strategy. When a company adds value for the consumer and is able to differentiate this value to the extent that the market interest consistently grows while creating a metamorphosis from consumer to long-term repeat customer, success follows. Disavowing the importance of front-line feedback is more a symptom of management’s inability to understand how to see criticism as a need and turning a need into a billable solution that the market is willing to pay for. The bad news is that Walmart is still in trouble, the real bad news is that a whole lot of companies are following this retail leader.
The current version of Walmart has completely forgotten Sam Walton. I can place a safe bet that it has become a huge bureaucracy pursuing the limited goals of each department head instead of the common goal of the company. This situation is a slippery slope that challenges the best of huge companies. Walmart has a very unique opportunity right now, but can they visualize it?
The top dog changes and those under his responsibility jockey for position to save their job. Some win some don’t.
Stores have struggled with being shipped excessive inventory of display merchandise driven by vendor partnerships. There has been a lack of leadership that addresses this issue. Greg Foran is seeing this and is taking action. This has been long over due.
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Hey, if it is good for the shoppers then it was a good move. The press and anti-Walmart people (the ones who say, “Oh, I don’t shop at Walmart”) thrive on any press that relates to Walmart changes. They just do not like successful retailers that have grown so large on simple Sam Walton principles.
If you were a retailer the size of Walmart and had to change so fast to keep up with today’s faster-changing shopper you would have changes like this too.
So ignore the noise and shop Walmart. Lots of people with BMW 700s and Mercedes and Porsche vehicles shop at the Walmart near me. They know that a better price for the same product is shopper smart.
Oh, for some rookies. When a person leaves a company it is normal to remove his or her bio from the website. The City Wire publication needs to learn more on digital standards.
Boy, what a telling statement about Black Friday. Tone deaf is a phrase that comes to mind.
I think Walmart’s management team was a bit complacent and equated size with trajectory. I like the idea of separate heads reporting to the CEO. As long as there aren’t 12 of them. The merchandise and reputation is stymieing potential growth.
The timing is pretty awful from a stock market perspective. I suppose it kind of gives Walmart a built in excuse for a lackluster Q4.
Shaking things up is a good idea. No doubt about it. It’s the timing that’s odd.
The change in management personnel appears similar to the changes in strategic direction. Walmart’s laser focus on operational efficiency and strategic management focus on low prices always are a thing of the past.
For literally decades now some of us have said that Walmart’s biggest challenge will be the problem of achieving exponential growth in markets they essentially dominate. The need for growth at any cost has sent the chain down some very scary retail rabbit holes with (what should have clearly been) predictably mediocre results.
So, what do you do when you are as big as you can logically get? Blame people, of course. It’s a kind of shell game for analysts. The hands move so quickly they seem to blur, the magic formula for growth aka finding the hero, appears and disappears and the audience— so bedazzled by the performance—completely forgets it’s a simple street con.
Changing bodies or org charts doesn’t begin to address the real problem—continuous growth may not be a) profitable, b) desirable or c) all of the above.
I remember many years ago when as a very young reporter I interviewed an executive from Gerber which then had something like a 70 percent share of the baby food market. “Could you get more?” I asked. “Sure,” he said, “but it would cost us more to gain three percentage points of share than it did do achieve the first 70, so what’s the point? It would be bad business.”
Smart thinking except when you are a public company whose rating and stock price depend on impressing analysts who don’t have—and probably never had—responsibility for a bottom line.
Sure, you need the right people in the right positions. But you also need to have realistic goals. My bet? There will be more heads rolling and more restructuring in the months and years to come. And by the way, they won’t have any significant impact on Walmart’s fortunes, one way or the other.
Sadly, this is the way of our world.
Lots of changes at Walmart. So they are shuffling the deck chairs and taking out a layer to be closer to the front lines. It takes a lot to change the direction of gigantic steam ship. I hope these changes bode well for them.
I can’t help wondering whether this move was related to the leaked memo about management of the produce area—which was probably more of an operations issue than a merchandising problem. Until Walmart gets its arms around these kinds of execution problems, it’s probably unfair to expect a chief merchant to be the center of the turnaround effort.
Trying to make something work is what executive management is employed to do. This is especially true for 21st century new business development as well as being engaged with a hostile economy for nearly a decade. Time constraints are enormous due to minimized staffing making every minute count as if it were an hour. Managing time to the extent that market feedback from front-line managers is overlooked, or even blatantly omitted, in favor of the execution of a plan in trouble is the formula for disasters like we have here.
But what is the root cause for this disaster which is showing up in an alarming number of companies that are either struggling or now gone? I keep seeing a trail pointing to reductions in recruiting staff, sales and marketing staff and corporate training tools. One of the first signs that a company is headed for trouble as a result of these department reductions is the entrenchment of selling price and allowing it to become a long-term strategy. When a company adds value for the consumer and is able to differentiate this value to the extent that the market interest consistently grows while creating a metamorphosis from consumer to long-term repeat customer, success follows. Disavowing the importance of front-line feedback is more a symptom of management’s inability to understand how to see criticism as a need and turning a need into a billable solution that the market is willing to pay for. The bad news is that Walmart is still in trouble, the real bad news is that a whole lot of companies are following this retail leader.
The current version of Walmart has completely forgotten Sam Walton. I can place a safe bet that it has become a huge bureaucracy pursuing the limited goals of each department head instead of the common goal of the company. This situation is a slippery slope that challenges the best of huge companies. Walmart has a very unique opportunity right now, but can they visualize it?
The top dog changes and those under his responsibility jockey for position to save their job. Some win some don’t.
Stores have struggled with being shipped excessive inventory of display merchandise driven by vendor partnerships. There has been a lack of leadership that addresses this issue. Greg Foran is seeing this and is taking action. This has been long over due.