Wal-Mart CEO reveals the company's 8 biggest problems
With sales in the US lagging, Foran has traveled to Wal-Mart stores across the country in search of ways to improve customers' experiences with the retailer.
Foran shared what he learned during his travels in a meeting with investors on Wednesday. Here's what he said:
1. Many Wal-Mart stores lack cleanliness and tidiness.
"We want this year to be the year of improving our stores," Foran said, according to a transcript of his remarks. "So by the time we hit holiday season, our stores are clean, tidy, well merchandised and run by engaged associates. Today in the main, we're not."
2. Stores aren't restocking shelves fast enough. "We've got too much inventory in the back rooms and our processes are not where we want them to be and that's causing some undue shrinkage and some out-of-stocks," Foran said.
The company has already started to implement some changes to fix these issues, such as marking down foods that are nearing their expiration date to reduce the amount of food that goes to waste.
3. Store layout and design compromises customer convenience and space in some cases.
"Both Supercenters and Neighborhood Markets have potential to be better" when it comes to layout, design, lighting, and even store temperature, Foran said.
"Some of the stores recently opened in our opinion are not quite as good as ones that we had opened in previous years," he said.
4. Digital services need to be integrated with physical stores.
For example, Wal-Mart wants to allow customers to order groceries online for in-store pickup and delivery - a service which the company is currently testing in some areas.
REUTERS/Ajay VermaA worker arranges oranges at a Bharti Wal-Mart Best Price Modern wholesale store at Zirakpur in the northern Indian state of Punjab November 16, 2012.
5. The retailer needs to improve traffic-driving side businesses like gas, care clinics and financial services.
"We have a mindset that we are building scalable profitable businesses whilst driving additional traffic to our stores," he said. "Consider how important pharmacy is to Supercenters and Neighborhood Markets as a traffic driver."
6. Prices aren't always as low as competitors'.
"While we have pockets of leadership [on price], in more competitive markets, our gain is too small," Foran said.
7. The brand needs to offer a wider product assortment in general merchandise, fresh produce, grocery and private label.
"When we get the assortment right, we know that the customers respond," Foran said.
8. The Bentonville, Arkansas headquarters needs to be focused on customer service.
"Our job at the home office in Bentonville is to serve the stores to in turn serve customers. Sam Walton, founder of our business based on this principle," Foran said. "But to be frank, in some recent years, we've slipped a little away from this. We've recently undertaken some important activities to simplify our organization and empower our stores, our associates in our stores to make decisions, but [there's] more to do."