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In January, a group of Bloomberg journalists, including senior BusinessWeek writer Devin Leonard, flew to the small city of Bentonville in northwest Arkansas.
The first time I went down was two thousand and five. It's in Benton County, which was a dry county at the time, so base you could go to Ruby Tuesdays and sign in. I think it was like some kind of a private club thing. That's the one place you can get a drink.
Bentonville has changed a lot since then, and a good amount of that change can be traced to the retail giant that's been headquartered there for the past six decades, Walmart. Sam Walton founded the first Walmart just a few miles from Bentonville in nineteen sixty two, and since then it's grown from a small town store to the largest retailer in the country, and in the last decade, under the leadership of its current CEO, Doug McMillan, Walmart has been
on a mission to revamp its image. It's Bentonville headquarters is a clear sign of that.
The company is opening a new campus. It's you know, three fifty acres twelve new buildings.
That's Jaywon Kong. She was also in that group of Bloomberg journalists who made the trip to Arkansas in January. Jay one covers Walmart day in and day out, so she's followed along as Bentonville has transformed.
The Walton family. They've you know, invested quite heavily in you know, hospitality, outdoor activities like mountain biking, and so that's created this new vibe of pipster and cool.
To me, it was literally like kind of like wandering into like Shangri La or in the Ozarks. It was a little hard for me to believe there's all these upscale restaurants, all of them with these fancy cocktail menus. We were staying in a boutique hotel that it literally you know, just opened and it had very nice sushi place in the lobby and the next.
Sushi in the Ozarks Rush. On their trip, Jaywan, Devin and BusinessWeek editor Brad Stone sat down with Walmart CEO in his office and they learned that the changes in Bentonville signal even bigger changes McMillan wants to bring to the company, and we're.
Trying to set the stage for the future. We want to be able to recruit and retain the best talent in the world. And having Bittonville progress in the way that it has, and having this new home office campus will be also whether it's food or the grounds, the bike trails, the lake, all those kinds of things I think will just help us do that.
I'm David Gura, and this is the big take from Bloomberg News Today. On the show Just what does the Future of Walmart look like, we take you inside the office of Walmart CEO to learn about the company's push to level up in Bentonville and to cross the US while it navigates concerns over retail competition, corporate talent wars, and a new political climate. Dud mcmillon's office is on the ground floor of a one story building. Bloomberg's Devin Leonard says, it's the longtime Walmart headquarters.
You know, the window looks out in the parking lot. It looks like an office, you know, more suitable for, you know, the head of a regional trucking company than you know, a multi billion dollar global company, the America's biggest retailer.
But it makes sense given Walmart's history. Walmart founder Sam Walton put in place a low price guarantee and his mantra for decades has been save money, Live better. And McMillan's office used to be Sam Walton's office.
There's a picture in McMillan's office of Sam Walton sitting at the same desk. So you're literally, you know, living in a shadow. The company's whole origin story is the Sam Walton story. The success we've had is because of our people.
That's Walton reflecting on the business in a video on the company's YouTube page.
They in turn, I've worked harder than our editors. We've kept our prices lower than our competitors' prices. He had this whole every day low prices discounter philosophy, and he just blew past serious. He blew pasted Kmart and so by the time of his death, which is nineteen ninety two, he was one of America's richest men. I think at
times he was America's richest man. But he was this folk hero, you know, this guy who drove around in a beat up old Ford that he used for hunting, and he kept a gun behind which which we Milan told us he had.
A shotgun behind the door in Tasty to go berten pack. Not zero weapons in the room.
Not there anymore. But McMillan has been very good at you know, sort of. He has one foot in the past and one foot in the present.
McMillan started at Walmart in nineteen eighty four. Bloomberg retail reporter Jay Won Kong says his first job at Walmart was unloading trucks at a warehouse.
He's spent his whole career at Walmart. He's someone that a lot of people who work at the company find really relatable.
McMillan became a buyer and worked his way up the corporate ladder. He was the CEO of Sam's Club, Walmart's membership warehouse chain named for Sam Walton. Then he led Walmart's international division before becoming CEO of the company in twenty fourteen.
Round the time when he took over, Walmart wasn't just trailing Amazon. Its e commerce sales were lower than eBay and Apple, so they were really coming from behind, and.
Walmart wasn't just lagging its rivals when it came to e commerce. When McMillan got the top job, the company was coming off years of slumping sales and a plateauing share price. Before he took the helm, there were years of discussions within Walmart about how they could keep customers from turning away from brick and mortar supercenters and toured online shopping.
And there was a big debate about what do we do about that, and some people thought, oh, you know, it'll never be bigger than the the US catalog market.
At that time, it was only about a two percent share of the US retail business that in those categories done three commerce, and people would say things like, we're not going to put a banana in a gallon of milk in a ups box and ship it to somebody's doormat, So how is food even going to work in e commerce?
They launched Walmart dot com in two thousand, but there really wasn't a commitment and there were always people, you know, thought Amazon, you know, it's not a big threat.
Back in two thousand, Amazon had been around for about six years and hadn't turned to quarterly profit. Walmart meanwhile, sat comfortably on top as the country's largest retailer. But in the next decade plus, as McMillan moved from running Sam's Club to Walmart International. He saw the way e commerce cut into business, and when he took over his CEO,
he set his sights on expanding Walmart's online sales. In twenty sixteen, two years after he became CEO, McMillan spent billions of dollars buying Jet dot Com and several other young online shopping sites in an effort to catch up. Jet was supposed to be Walmart's e commerce brand, but within a few years, Walmart had shut Jet down and finally decided to put its weight behind its own online store, which was good timing. When the pandemic hit.
A lot of stores were shut down or they didn't have products you know, on shelves. Walmart, because they are the biggest, and they were in a lot of you know, parts of the country one of the few places that remained open. So they gained new consumers during that timeframe. And when inflation started and prices of i mean everything went up, they were able to appel to newer consumers as well. Well.
And also if they're delivering stuff, you know, within an hour, because in ninety percent of Americans live within ten miles of a Walmart.
Now Walmart is the world's second largest e commerce company, with US sales expected to reach one hundred and fifteen billion dollars this year, according to market research company e Marketer, But in the company's latest earnings report, its profit forecast was below what Wall Street analysts expected, and an expected one hundred and fifteen billion dollars in e commerce is still a fraction of Amazon's expected four hundred and eighty
seven billion dollars in US online sales. McMillan is hoping to close that gap.
Actually, my first day, when I was a teenager applying for a job, there was a poster over the recruiting desk for the warehouse that had a Walmart tractor trailer running a Kmart tractor trailer off the side of a mountain. So, you know, at seventeen years old, I'm like, huh, this is a competitive spot. I like that, and I know who were competing against, and that representation that was on
the wall showed us behind. I like that and our peripheral vision, we're seeing the very best competitors and studying what they do and then take the best of what they do and apply it.
If you can't to compete with fast fashion companies like TIMU. E commerce behemoths like Amazon and retail competitors across the spectrum. Walmart and McMillan have to face a few challenges. There's keeping Walmart's workforce of over two million global employees happy, pitching the brand to more upscale shoppers, and navigating a
complicated political environment. How McMillan is trying to do all that after the break to keep Walmart on top, Doug McMillan wants it to appeal to as broad an audience as possible. That means expanding beyond the deal seekers and trying to capture higher end shoppers. But Walmart has tried this before and it didn't go so well the first time around.
In two thousand and five, they rolled out this line of apparel aimed at urban women, which certainly wasn't their core customers, called Metra seven, and they promoted it within an event a New York Fashion Week with a big apage spread in Vogue that kind of bound because the clothing really didn't appeal to upscale buyers, then it was
too expensive for their core customer. They also embarked on something not long after that called Project Impact, which was an attempt to make the stores look and feel a little more like Target, which traditionally appealed to a more affluent demographic, and that didn't work out either. I mean then they kind of widened dials and took items off the shelf, and they kind of had to reverse a lot of that. So now they're kind of doing that again.
They have two new clothing line, Scoop in Free Assembly and Jay one and I went to a New York Fashion Week show. Their creative directors Brandon Maxwell, who's you know, the very well known fashion designers. Yeah, and you know, done dresses for Michelle Obama. And at the same time they've embarked on a big sort of rebooting of a lot of their stores. They're sort of walking type broke, and you walk around, you see fancier you know, Pete's
and things like that. At the same time you see two dollars displays of belvi To cheese and things like that, and they say it's work.
Walmart reports that more than seventy five percent of their market share gain last fall came from customers with annual incomes of over one hundred thousand dollars, and the company is hoping it's e commerce business will extend those gains because shoppers who wouldn't normally set foot in a Walmart's store can buy from the retailer online, shoppers like Bethany Frankel of Real Housewives of New York fame, who bought a new bag on Walmart's website. Frankel posted a review
of that bag on TikTok. It's a knockoff of the Ermez Birken bag, which some people call a work in.
So here's the thing.
This is eighty five dollars. This is like twelve thousand.
This is like flying Private, This is like flying Spirit in the luggage compartment. While she said the work in was Spirit Airlines quality compared to the real thing, she still found plenty of things to complement and inside it actually doesn't look all that different. The bag went viral and then the company took it down after all, it
was a fake. It's worth noting even though it's sold on the Walmart dot com marketplace, it's not something Walmart makes Walmart dot Com now, just like Amazon sells third party products.
Managing the customer experience in trying to build trust and being responsible for things in a world where you don't actually own all the inventory and make all the decisions is more challenging.
If managing a marketplace whose inventory it doesn't fully control is one challenge, and even bigger one is managing a company with Trump back in the White House. Every CEO of Walmart for the past half century has worked with the sitting US president. It's part of the job. But during Trump's first term, McMillan made his criticisms of the
president known. In twenty seventeen, he condemned Trump's response to a violent protest in Charlottesville, Virginia, saying, Trump this just an opportunity to quote, bring the country together by unequivocally rejecting the appalling actions of white supremacists, unquote. And even before that, he'd weighed in occasionally on some hot button social.
Issues, doing things like lobbying state officials in Arkansas and not to pass a bill that would have restricted GBT rights.
It's not clear he'll be taking the same tack this time around. In early January, McMillan traveled to Florida for a meeting at Mara a Lago, and this is what he said.
He told Trump, We're here long term, We're a large employer, we serve a lot of people. We want the country to thrive. How can we be helpful?
Like many US based multinational companies, Walmart will be affected by the president's protectionist policies. McMillan says he's not too concerned. Walmart dealt with new tariffs during Trump's first term, but Jaywan says the economic picture is different in twenty twenty five.
Another factor to take into account is years of historic inflation, and there's a huge uncertainty around how that's going to impact consumer spending. And Walmart, you know, they're used to operating under this environment.
And Devin says there are less obvious ways Trump's policies could hit Walmart's bottom line.
Robert F. Kennedy Junior Health and Human Services Secretary, but he doesn't think that food stamps should be used to buy processed food and sugary.
Drinks, and Walmart receives about twenty six percent of SNAP benefit spending. Walle McMillan tackles these challenges. He said that at the top of his mind is the ordinary task of being boss, recruiting and retaining good talent. When he took over in twenty fourteen, Walmart faced dissatisfaction from some employees who were trying to organize, McMillan raised the company's starting wage and offered better benefits.
Everything we do wages, cash bonuses, equity, health care decisions. We're trying to build a ladder that people want to get on to build a career, not just come for a job.
For a or two.
Successful store managers can now make over six hundred thousand dollars a year. The company also recruits employees from Google and Amazon, and last year Walmart shares rows by seventy two percent, and in the years ahead, McMillan's big bet on Bentonville could test things. The company is closing some satellite offices and asking many employees to relocate to the
new Arkansas headquarters. McMillan himself is also moving desks and will soon say goodbye to Sam Walton's storied office in the old HQ.
It's still a hard sell even with all of this quote unquote cooler stuff, and people are riding around in knee bikes and fancy coworkingess centers and great cocktails.
Doug and the other executives are super focused on keeping their momentum going, keeping up with competition and growing and making sure that they don't fall behind again.
This is the Big Take from Bloomberg News. I'm David Gora. This episode is produced by Julia Press. It was edited by Aaron Edwards and Danielle Sachs. It was mixed and sound designed by Alex Sekura and fact checked by Adreana Tapia. Our senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole Meemster Boor. Sage Bauman is Bloomberg's head of Podcasts. If you liked this episode, make sure to subscribe and review The Big Take wherever
you listen to podcasts. It helps people find the show. Thanks for listening. We'll be back tomorrow