By Matthew Boyle - Jul 22, 2010

Wal-Mart Stores Inc.’s new U.S. stores chief is shifting away from widening profit margins through inventory reductions to focus on sales growth, according to Cleveland Research Co.

Bill Simon is bringing back promotional displays at the front of stores, returning more items that were removed and dialing back price cuts, Jeff Stinson, an analyst at the Cleveland-based equity researcher, said in a report this week. Simon, Wal-Mart’s former U.S. operations chief, replaced Eduardo Castro-Wright last month.

“We are seeing the ‘old’ Wal-Mart approach surface on merchandising as well as pricing,” Stinson said. “Rebuilding top-line sales looks to be the No. 1 objective.”

Sales at U.S. stores open at least a year have fallen for four consecutive quarters after the removal of grocery products and increases in gasoline prices, putting pressure on Simon to lure back shoppers. Wal-Mart, the world’s largest retailer, faces increasing competition from big-box rivals such as Target Corp. and discounters such as Dollar General Corp.

Wal-Mart spokesman Greg Rossiter declined to make Simon available for an interview or to discuss any changes Simon is making.

Wal-Mart rose 62 cents to $50.97 at 11:35 a.m. in New York Stock Exchange composite trading. Before today, the shares had gained 1.6 percent since June 28, the day before Wal-Mart announced that Simon would take over the U.S. stores.

The comparable sales declines are particularly worrying to some shareholders as the rest of the industry shows improvement, according to David Abella, a portfolio manager at Rochdale Investment Management in New York. His firm manages $2.9 billion including Wal-Mart and Target shares.

Frustrating Experience

“If I go to Wal-Mart, I expect to find almost anything,” Abella said. “Reducing inventory makes things leaner and meaner, but it’s also very frustrating when a big box does not have what you want.”

This year, Wal-Mart returned about 300 items to shelves after initially pulling them, Simon said at a March investor conference, when he was still the operations chief. Leon Nicholas, a director at consulting firm Kantar Retail who’s based in Cambridge, Massachusetts, said Wal-Mart has returned thousands more since then.

“We assume they’ve brought back 3,000,” he said in a telephone interview. Some of the returning products have tags attached on the shelf saying, “Look What’s Back.”

Simon’s strategy is a departure from that of John Fleming, the U.S. merchandising chief who is leaving Aug. 1. Fleming was an architect of Wal-Mart’s so-called Win/Play/Show strategy, where products with the best growth and profit prospects got premium shelf space.

Adding Back Items

In the past two years, Wal-Mart has removed items in slower-growth “show” sectors like tools, and bulked up “win” categories like consumer electronics and pet products, aiming to reduce inventory and expand profit margins. In the year ending Jan. 31, inventory declined by $1.8 billion in the U.S. Company- wide gross margin, the percentage of sales left after the cost of goods sold, widened to 24.8 percent from 24.2 percent.

That strategy appears to be over, according to analysts such as Cleveland Research’s Stinson and David Palmer at UBS Securities LLC. Instead the retailer is renewing its focus at some stores on “Action Alley,” the high-traffic area in front near the checkouts, which had earlier been cleared out to reduce clutter.

“The quickest change we have seen over the last couple weeks is that pallets are returning to Action Alley,” according to the Cleveland report. “Overall inventory is beginning to ramp back up as quickly as possible.”

‘3 in 30’

The report cites an objective to get Wal-Mart’s merchandising strategy back to where it was three years ago in 30 days. The initiative has been dubbed “3 in 30.”

Wal-Mart has not changed the forecast, made in May, that same-store sales for U.S. locations will range from negative 2 percent to positive 1 percent this quarter.

This year, the retailer has lowered prices on ketchup from H.J. Heinz Co. and Procter & Gamble Co.’s Crest toothpaste in so-called rollbacks aimed at driving sales growth. Those cuts went too deep and failed to boost sales enough, and Wal-Mart has since raised prices on some items, Stinson said.

To contact the reporter on this story: Matthew Boyle in New York at Mboyle20@bloomberg.net.

by Clinton Lancaster

Cameron Smith & Associates has earned a reputation in the recruiting industry that is unmatched. In the supplier community, they are a household name. For job seekers, they are an invaluable resource.

But when I signed on as the company’s marketing specialist, brought in to help them increase their social media presence among other things, I was amazed to discover the true nature and scope of their services and offerings to both companies and qualified candidates.

Most know CSA as an executing recruiting firm, “connecting Wal-Mart suppliers with the best and brightest talent,” as their tag line mentions.

Make no mistake about it - CSA has earned the praise and accolades it has received. CSA employs a small but talented group of associates, and I was amazed to see how well they work together towards the ultimate goal of matching the right talent with the right position.

What surprised me is the dedication and expertise that goes into other areas of their business - outplacement, career coaching, resume services, retail specialties and consulting services. Taking their reputation and experience in executive recruiting and applying it to other business avenues seems like a natural fit for CSA, whose associates bring an incredible amount of experience to the table.

Their endeavors into the outplacement and career coaching arenas show versatility and a wide range of experience. A dynamic support team provides expertise in the field of resume services and placement.

CSA’s core values and dedication to the highest quality of service cannot be overlooked. Their dedication and commitment to treating every client and candidate with the utmost respect and care form a strong foundation on which their success is based no matter what area of their business.

As I’ve met the team that makes up CSA, all of whom have treated me with sincere kindness and respect, I have come to learn how an industry leader gets to that level. Each individual associate in the company is intelligent, caring, and hardworking.

Cameron Smith has done an incredible job in gathering talent and great people around him. I’ve read several quotes from Cameron who has said something to the degree that he’s been successful because he’s surrounded himself with people smarter than he. I definitely understand where he’s coming from, but I have to disagree. Cameron is one of the most intelligent people I have ever met. He is also one of the kindest.

The opportunity he has given me - to learn about this company and engross myself with its dealings - is something I will never forget. The company he has built, the associates he has surrounded himself with, and the way he’s done it all makes him an incredibly inspiring person.

In the end, a company’s success depends on the way they handle their customers and the way they handle their employees. This simple fact brings about success and CSA is as successful as it gets in the industry.

The next time you think about CSA, consider not only their talent and experience in executive recruiting, but also that that they take those same great qualities and apply them to every aspect of their business.

by Cameron Smith

Some days it seems the only constants in the world of retail are change and Walmart.  In a slower economy, Wal-Mart continues to fare well. But with over 100 million consumers in the U.S. shopping its stores every week, Walmart must continue to reinvent itself to ensure it is creating a pleasant shopping experience.

Right now Walmart is seeking more in-depth market, category and consumer insights to support a major shift in the merchandising organization.

Suppliers will need to adapt to keep pace.

• Providing insights Walmart expects as it develops strategies going forward will be key to strong supplier relationships and influence with Walmart.
• Leaner teams mean CPG managers will require unparalleled technical expertise balanced by fact-based selling skills.
• Job descriptions for analysts and category advisors will continue to evolve rapidly as Walmart makes substantial changes to how they evaluate POS and shopper insight information.
• Attracting and retaining talent with the experience and skills to adapt to these new business rules is essential.

It all comes down to recruiting and retaining the best people.
Cameron Smith & Associates has earned the reputation as experts and trusted advisors to the Walmart supplier community. We are uniquely positioned to keep pace and even anticipate changes to Walmart’s expectations of suppliers to help your company achieve cutting-edge results. Our business is connecting the best people, the best companies and the best resources in Bentonville and beyond.

Best-in-Class Resources
CPG Diagnostic: Tighter hiring restrictions and the need for CPG firms to reduce risk on how analysts and category advisors actually perform in the trenches inspired the launch of CPG Diagnostic. “Connecting the dots” is an essential skill category managers use to assemble the puzzle of disparate data sources. CPG Diagnostic delivers an evaluation of frontline team members’ abilities and finally allows companies to rank candidates accurately and objectively on key skills before making critical hiring decisions.

8th & Walton:  8th & Walton is a Bentonville-based supplier development company offering services and solutions for organizations to do business better with the world's largest retailer. High performers with experience working inside Walmart and within the supplier community teach tools essential for doing business in Bentonville.

Connect with the Best and Brightest.
Walmart will move forward to meet consumer needs whether every supplier can keep pace or not. Successful teams will need agility, speed and talent. Let CSA introduce you to the best and brightest talent in Northwest Arkansas and best-in-class resources to better manage and grow your Walmart business.

Sincerely,

Cameron Smith

by Mike Whittington

Category management continues to be a hot topic in the Wal-Mart supplier world. Questions come from both candidates and companies as to how teams will change to meet Wal-Mart’s category management requirements.

Bill Akins at Shiloh Technologies recently shared his thoughts on trends to watch in category management:

• Suppliers are continuing to place emphasis and resources on their category teams and ensure a clear division between the category people and the sales teams. 
• Suppliers are also treating categories as distinct business units and structuring their teams to support each business unit. Large suppliers with multiple business segments are building teams around each category.
• Many tier-1 suppliers are adding a Team Lead and/or Director of Category Management to manage the local category team and serve as a liaison between corporate Marketing Research / Shopper Insights and the local Wal-Mart team. This person plays both an internal and external role, regularly meeting with their company’s departmental Wal-Mart Shopper Insights Manager and Wal-Mart Marketing Research manager on top of standard buyer appointments.
• Shopper Insights will continue to play an important role complementing Category Management…particularly around consumer insights and how manufacturers evaluate current efforts and adjust programs designed to deliver investment goals.
• The trend toward more Consumer Insights will change the job description for a category advisor. Top category advisors will be those who can build the story and tell the story. “Connecting the dots” is an essential skill that enables category managers to put together the puzzle of disparate data sources and create a value equation on a rolling basis.
• The best category people will be able to “manage the store experience” and link the process of category development with trade promotions and customer business plans. Category advisors will be more solution-oriented rather than focused on reports or drawing modulars.
• “Knowing your shopper” will require a deep dive into consumer insights and determining the difference between the shopper and the consumer because they are often not one and the same.

Overall, Bill emphasized that insights, strategy and trending are the new “currency” of category management.
We invite your comments. What changes are you seeing in category management?

Every day we talk with people who are looking for a way to segue into the Wal-Mart supplier job market. If you are considering a career change or working to move up in a consumer goods company in the Wal-Mart supplier community, you should know about 8th & Walton.

Last week I talked with a candidate relocating to Northwest Arkansas who had just completed 8th & Walton’s Introduction to Retail Link class the night before. She was excited to see the power and possibilities behind Retail Link. This one introductory class confirmed for her that she was on the right track in pursuing her goal to become a Retail Link analyst.

An independent supplier development company, 8th & Walton has tapped into the knowledge of industry experts to help suppliers build their business with the world’s largest retailer. The company (named for Wal-Mart's Bentonville corporate address) has been so well received, it very quickly expanded its course offerings and is hosting packed events in Dallas, Chicago, Boston, Cincinnati and Los Angeles. Courses include

• Retail Math & Business Analytics
• Introduction to Retail Link
• Introduction to Space Planning
• Strategic Category Planning
• Selling to Wal-Mart
• Sustainable Packaging Scorecard

For a complete list of courses, schedules and costs, visit http://www.8thandwalton.com/index.php.