Wal-Mart Stores CEO Doug McMillon told students and young professionals at last week's annual Net Impact Conference in Philadelphia that the retailer aims to improve its mark on the planet through a series of eco-friendly initiatives and other socially minded reforms across its operations.
McMillon spoke of Wal-Mart's redoubled efforts to sell more locally sourced produce, reduce emissions, leverage energy efficiencies, get to zero waste in key areas of the U.S. and Canada, and offer more sustainably produced merchandise.
McMillon also said the retailer aims to be a better place to work, citing its boost in its minimum hourly pay and more flexible work schedules, and said that additional training and opportunities for career advancement will make Wal-Mart a good place for a first job — and beyond. He added the company is working to ensure that overseas factories are humane places to work.
There are ample reasons for a big box retailer like Wal-Mart — the biggest in the country and the world — to take steps to foster a more sustainable, civic-minded business.
For one thing, solar projects and energy efficiency measures could save the company a lot of money. Also, when it comes to employee salary and treatment, the U.S. at the moment is enjoying a healthy employment rate, and it behooves companies to pay adequately and offer scheduling and advancement opportunities in order to attract and keep workers. Last year, Wal-Mart raised starting wages for full-time store employees to $9, or about $18,700 a year, and new hires can climb to $10 an hour after completing a six-month training program.
Last but not least, younger consumers like millennials and the generations coming up behind them are particularly interested in buying from retailers that adhere to practices that are humane and friendly to the environment.
“We want to make sure Walmart is a company that our associates and customers are proud of — and that we are always doing right by them and by the communities they live in,” McMillon said in a statement. “That’s really what these commitments are about. And that’s why we’re so passionate about them.”
The question for Wal-Mart is where the rubber hits the road: Will it opt for such practices if it impairs the company's ability to keep its “always low prices” promise? Wal-Mart is aggressively cutting prices to wrestle back market share from the likes of dollar stores and Target, and that could hurt those rivals to the tune of $35 billion worth of business, according to a UBS research paper.
And as Wal-Mart turns its attention to boosting its e-commerce fortunes, fast-growing competitors from Germany could spark a grocery price war similar to the one being waged in the U.K., where Wal-Mart’s Asda grocery effort has suffered. Not to mention that the push to boost e-commerce includes notoriously thinner margins, with fulfillment and delivery costs that are hitting profits even at e-commerce stalwart Amazon.
Wal-Mart is scheduled to report its third quarter earnings next week. In August the company reported second quarter earnings of $3.77 billion, up from $3.48 billion a year earlier. Q2 same-store sales jumped 1.6% — the largest same-store sales growth in four years — thanks to increased traffic in stores and online.