Doug McMillon, a lifetime Walmart employee who started out in the retailer’s warehouse, has been handed the reins of the world’s biggest company by sales as it grapples with a weak US economy, rocky emerging markets and the aftermath of corruption allegations.
Mr McMillon, head of the group’s international business, will take over as chief executive from Mike Duke as Walmart tries to reverse falling US sales and fix its China and Brazil units while awaiting results of probes into alleged bribery in Mexico.
Walmart announced the change yesterday in the week that the end-of-year shopping season begins, when it will be tested as it tries to keep up with consumers who are increasingly frugal and ready to shop online.
Mr McMillon is known as a favourite of the children of Walmart’s founder, Sam Walton, who own about 50 per cent of the company. His elevation was not a surprise but came sooner than many analysts expected.
Mr Duke will step down on January 31 after four years. In his previous job he was in charge of Walmart’s non-US business for part of the time during which it allegedly paid bribes in Mexico to get permits for new stores.
“His decision to retire had nothing to do with the ongoing [corruption] investigation,” Walmart said. When the allegations emerged last April, Mr Duke let it be known that he was “fully supportive” of Walmart’s own investigation.
Mr Duke took over at the depths of the financial crisis and has increased Walmart’s sales from $405bn in his first year in charge to what analysts expect to be $478bn this financial year. But its shares have underperformed the S&P 500 as new challenges have emerged.
Mr Duke ended a run of nine quarters of falling US sales that began before he took over but domestic sales have fallen in the past three quarters and Walmart has forecast that US sales in the Christmas quarter will be “relatively flat”.
As it seeks to woo cash-strapped consumers Walmart is facing stiffer competition from Amazon and dollar stores as well as traditional rivals such as Target, Costco and Kroger.
Faye Landes, analyst at Cowen & Co, said Mr McMillon’s priority as chief executive should be getting the international business back on track.