FAYETTEVILLE — Evidence of a two-year sales slump at Wal-Mart Stores Inc.’s U.S. stores was scarce Friday inside Bud Walton Arena, except for pledges by executives to fix the problem, as thousands of employees from around the globe gathered to celebrate the company’s culture and success.
Sam’s Club employees were traditionally jubilant, jumping to their feet with noisemakers each time the wholesale club operation was mentioned. Sam’s has recorded a string of increases in sales at stores open at least a year, a key measure of success in retailing.
“Quality merchandise is the secret to our success,” said Brian Cornell, president and CEO of Sam’s Club. “I believe this could be the best year ever for Sam’s Club.”
This year’s host of the shareholders meeting, rapper, actor and producer Will Smith, praised the crowd of 16,000.
“I love this crowd. You guys are legendary for your rowdiness,” he said.
Smith took a break from filming Men in Black 3 in New York to make his second appearance as host for the annual meeting, first appearing on the stage at Bud Walton Arena six years ago.
Throughout the U.S. stores’ slump, Wal-Mart has remained profitable, and shareholders’ spirits likely were boosted by news that the company is embarking on a new $15 billion share buyback program, which includes $2 billion left on last year’s plan.
“Wal-Mart is the best-positioned retailer on the globe,” Mike Duke, president and chief executive officer, told the crowd.
“We are a financially strong and stable company. That financial strength also enables us to really deliver shareholder value,” he said. “Through dividends and share repurchases, I’m proud that last year your company returned to shareholders a record $19.2 billion. And where is Sam’s Club? Talk about growth. Your sales are fantastic. You have real momentum.”
Every mention of the wholesale club division brought cheers.
Rob Walton, company chairman and son of founder Sam Walton, had to pause for the cheering to die down after saying the division name.
“You have to be careful about saying the ‘S’ word,” he told the laughing crowd.
For the first quarter of this year, Sam’s Club, recorded a 4.2 percent increase in same store sales, excluding the impact of fuel sales.
Wal-Mart is dealing with increasing competition from dollar stores and other discount chains at a time that its core customer is being squeezed by gasoline prices and a weak job market.
The company is in the early stages of rolling out a new, small-format store called Wal-Mart Express for both urban and rural locations, aimed at luring customers seeking a quick shopping trip.
Wal-Mart’s stock closed Friday at $53.66, up 11 cents or 0.21 percent.
It has traded between $47.77 and $57.90 in the past year.
Sprinkled throughout the nearly four-hour meeting were appearances by various celebrities, a staple of the company’s shareholder events.
The Canadian Tenors, American Idol winner Scotty McCreery, Alicia Keys and the Black Eyed Peas kept the crowd on its feet during their performances.
Also peppered throughout the meeting were mentions of how Wal-Mart employees and the company as a whole were helping each other and their customers during various natural disasters.
Doug McMillon, chief executive officer of Wal-Mart International, spoke of the store manager in Japan who rode a bicycle for 10 hours to get to his store, a trip that before the earthquake and tsunami ravaged the area in March typically took only minutes by car.
“And then he went to work,” McMillon said.
A special seating area was set aside for the approximately 80 Joplin, Mo., employees who made the 90-minute trip to the meeting.
A tornado that struck the southwest Missouri city leveled more than six miles of commercial and residential neighborhoods and killed 138 on May 22. More than 200 people took refuge in a safe area of Wal-Mart Store 59 on Range Line Road during the storm.
There were deaths and injuries inside the Wal-Mart although the company has not said how many.
The storm has been declared the single deadliest tornado in the U.S. since 1950.
Store 59 manager Andy Martin helped to introduce Bill Simon, president and CEO of Wal-Mart U.S., before Simon’s presentation.
After completing his speech, Simon immediately left the stage and made his way out to the crowd to shake Martin’s hand.
Duke outlined five priorities: controlling costs to execute its everyday-low-price strategy; expanding its customer base through store acquisitions and building new stores; taking its online business to a global level; expanding environmental sustainability efforts; and recruiting more women and minorities for leadership roles.
And he said the company is focused on the “next-generation customer” who is connected through social media and smart phones and knows where to find the best deals.
Simon said the company is continuing to restore products that were removed during Project Impact, which has been cited as the cause of the U.S. stores sales slump.
“It’s pretty simple. Our customers can’t buy it if we don’t sell it,” he said. “It will take time, but I have no doubt we’re moving in the right direction.”
As he spoke, a Twitter post in the background said, “Apparently, taking away customers’ stuff was a bad idea.” Another tweet: “Welcome back, Action Alley ... I missed you.”
Action Alley, which the company had discontinued, features stacks of featured merchandise on pallets in store aisles.
The tweets were flashed around the perimeter of Bud Walton Arena on high-definition screens during the meeting, part of an interactive shareholder meeting experience, company executives said.
The screens, six large ones on and around the stage and four free-hanging screens on the upper deck level, were part of a new stage design that featured multiple levels, stairs and sliding panels for easy instrument movement for the musical acts.
Business, Pages 29 on 06/04/2011