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Wal-Mart accentuates positive to stockholders

At its annual meeting, the retail giant focuses on new initiatives rather than groups' criticisms.

By ASSOCIATED PRESS
Published June 3, 2006

FAYETTEVILLE, Ark. - Wal-Mart Stores Inc. used its annual meeting Friday to tout changes to its stores, trumpet its expansion in the United States and abroad, and emphasize that the world's largest retailer is undergoing changes to sustain its rapid growth rate.

The company's critics urged Wal-Mart to offer higher pay and better health insurance, and make other changes for its 1.3-million U.S. workers.

Wal-Mart chief executive Lee Scott didn't directly address the union-financed groups. Instead, Scott and other executives discussed Wal-Mart in terms of building on successes, rather than righting wrongs.

The executives drew an enthusiastic response from the 15,000 shareholders and workers packed into the University of Arkansas' Bud Walton Arena. The meeting sprinkled panel discussions and speeches between a couple of celebrity appearances.

Scott said Hurricane Katrina inspired a new vision at Wal-Mart. He noted the company's rapid effort to provide relief supplies, a move that drew praise from Wal-Mart's critics. Scott said he asked, "How can we use our unique strength to be that company all the time?"

Wal-Mart has several experimental stores, where it is testing new designs and aisles that have merchandise targeted to the local demographics, including an "urban and multicultural" store in the Chicago area.

The company is streamlining its inventory to speed items to shelves and trim the time between manufacture and arrival of items in the stores. And many of those items will increasingly be geared to upscale shoppers, executives said.

Chief financial officer Tom Schoewe said the company can still build sales growth in existing stores while gaining market share in the United States and internationally. In the past year, Wal-Mart acquired stores in Brazil, entered into a partnership with a retail chain in Central America and finished its push to gain a majority share of Seiyu Ltd. in Japan.

The company is adding about 600 stores this year, about a third of which will be international, including Canada's first three supercenters. Wal-Mart has more than 6,500 stores in 15 countries and serves 176-million customers per week.

Schoewe said the company intends to keep expanding its retail footprint by 8 percent annually.

"We haven't wavered at all," Schoewe said, noting the company is adding between 270 and 280 supercenters in the United States this year. Wal-Mart had net sales last fiscal year of $312.4-billion.

In past annual meetings, the company has addressed critics, and Scott one year warned managers they'd be fired if they exhibited bias in the stores. But this year, Wal-Mart returned to celebrating the company.

Board chairman Rob Walton, son of Wal-Mart founder Sam Walton, said his late father would be surprised at the scope Wal-Mart has taken on, but would be right at home with the changes the company is undergoing.

"Nobody loved change more than Sam Walton," Rob Walton said. "As long as we continue to change, there are no limits to what we can achieve."

All the shareholder proposals put forth at the meeting were rejected. One proposal, which asked that Wal-Mart issue an equal opportunity report, was removed from the agenda after the company agreed to quantify its women and minority workers and to define their duties.

Scott said the company shows every day that it is a good place to work. He cited thousands of people applying for a few hundred jobs at new Wal-Marts, a health plan that is open to full- and part-time workers who, after a year in the plan, will have no cap on how much the plan will pay in lifetime benefits.

Critics of Wal-Mart, including the union-backed groups Wal-Mart Watch and WakeUpWalMart.com, have taken credit for recent improvements in the health plan and say that, as the world's largest private employer, Wal-Mart can set a new standard for other large employers.

Singer Beyonce performed at the end of the meeting. American Idol finalist Taylor Hicks sang a pair of songs.

[Last modified June 3, 2006, 06:21:26]