New Wal-Mart Leader to Focus On Domestic Domination

Within the space of two weeks’ time early next year, we will inaugurate a new leader of the most powerful nation in the world on Jan. 20, followed on Feb. 1 by the transition to a new leader of the largest and most powerful retail company in the world. H. Lee Scott, while remaining chairman of the executive committee of Wal-Mart’s board of directors, will be replaced as CEO and president by Michael T. Duke.

I do not mean to trivialize the occupant of the Oval Office by comparing him to the executive who sits in the same office where Sam Walton envisioned a global empire. But a case could easily be made that in the nine years that Lee Scott held the highest office in retailing, his policies directly affected the daily lives of American and global citizens as much as, if not more than, the president of the United States. During Scott’s stewardship, he has grown in stature and in understanding the power a company with $400 billion in sales can wield.

Take Hurricane Katrina as an example. Wal-Mart mobilized support for Gulf citizen-consumers faster and better than the federal and state governments.

Another example—while the federal government dawdled on energy conservation, Wal-Mart acted. It developed energy-saving technologies for its stores and truck fleet. And, one day before revealing Scott’s retirement, Wal-Mart announced it would make its first substantial purchase of wind energy to power operations in Texas. The renewable energy will supply up to 15% of the retailer’s total energy load for approximately 360 Texas stores and other Wal-Mart facilities. The wind farm will begin producing electricity for the chain by April 2009.

Under Scott, Wal-Mart also championed the sale of energy-efficient light bulbs and organic-cotton products. It funded local farming efforts. It provided counseling to small retailers affected by its massive stores.

Wal-Mart has not been a perfect corporate citizen during Scott’s term of office. But he has not been dogmatic. He has opened dialogue with many of the company’s detractors and critics.

When Scott first assumed office in 2000, he was barely known outside Bentonville. In the last nine years he has transformed Wal-Mart from being just a selling machine (which it still is) to a company that more completely understands its global position and responsibilities. But as important as world markets are to Wal-Mart, the short-term emphasis of the new leadership may well focus anew on the domestic front.

As vice chairman of the international division, Duke has amassed foreign experience and expertise. But let’s not overlook his 23 years with Federated and May Department Stores. He knows U.S. retailing.

Days before the transition announcement, which included his elevation to vice chairman, Eduardo Castro-Wright, president and CEO of Wal-Mart US, told a Morgan Stanley Global Consumer & Retail Conference the company will focus on 15 “opportunity markets…where we have a 3.9% share as opposed to our average of 8.9%. Those 15 markets represent 34% of total U.S. retail sales, and they are nearly the size of the entire retail market in China and larger than Russia and India combined.”

As the current economic crisis spreads across the globe, world expansion apparently will take a back seat to continued domestic domination.