Wal-Mart CEO McMillon Tries to Navigate Retailer Out of its Woes

And while all of the above represent relatively recent dynamics that McMillon must deal with, at least one thing hasn’t changed for Wal-Mart: its high-profile role as a corporate and even social bellwether. Everyone from its massive customer base to its 1.3 million U.S. employees to its restive shareholders to activists of every size and description still closely scrutinize every move Wal-Mart makes, and many remain more than ready to call out McMillon if they don’t like what he does.

“McMillon’s newest gambits include just-announced plans to eliminate health-insurance coverage for some of its part-time U.S. employees.”

Now McMillon has launched a number of initiatives aimed at helping Wal-Mart improve the top line, the bottom line or both. Because with the crucial Christmas-holiday season nearing, the competition is still intensifying for the retailing dollar that American consumers remain reticent to use in an era of sluggish income growth even while the U.S. economy finally seems to be recovering.

McMillon’s newest gambits include just-announced plans to eliminate health-insurance coverage for some of its part-time U.S. employees because of rising costs and the particulars of Obamacare. The Affordable Care Act requires major employers to offer health-care insurance to all workers who toil at least 30 hours a week, which has prompted many of them —already including Target and Home Depot—to make a move similar to Wal-Mart’s.

Wal-Mart will discontinue existing coverage on January 1 for employees who work less than 30 hours a week, who comprise about 2 percent of the company’s American employees. In addition to the new burdens brought by Obamacare and how health insurers and other marketplace constituencies have reacted to it, Walmart has been facing generally rising health-care costs.

“This year, the expenses were significant and led us to make some tough decisions as we begin our annual enrollment,” said Sally Welborn, the company’s senior vice president of global benefits, in a post.

“It now plans to offer consumers one-stop shopping in multiple channels for health-care insurance.”

At the same time, however, Wal-Mart also said that it now plans to offer consumers one-stop shopping in multiple channels for health-care insurance. Wal-Mart is working with DirectHealth.com, an online health-insurance comparison site and agency, to allow shoppers to compare coverage options and enroll in Medicare plans or the public exchange plans created under Obamacare.

Availability of this service in the stores, online and by phone is supposed to help Walmart compete more effectively with drugstore chains that are rapidly adding health-care services. Walmart already operates health-care clinics in dozens of its stores.

On another front where his company is expanding the traditional definition of a mass merchandiser, McMillon has authorized the rollout of a new checking product called GoBank, which provides a smartphone-friendly account with California’s Green Dot Bank after a consumer buys a $2.95 “starter kit” at a Wal-Mart. It’s aimed largely at the “unbanked” lower-income consumer that is Wal-Mart’s staple clientele.

And McMillon must continue to work on Wal-Mart’s sustainability positioning, for a variety of reasons. His latest plan to develop a sustainable food-supply chain involves improving access to food, making healthier eating easier to understand, improving the safety and transparency of its supply chain and affordability.

“We’ve learned on our sustainability journey that we’re most successful when your initiatives create social and environmental value and business value at the same time.”

“The future of food is absolutely critical for both our society and our business,” McMillon said in a statement. “We’ve learned on our sustainability journey that we’re most successful when your initiatives create social and environmental value and business value at the same time.”

Among other things, Wal-Mart now plans to provide four billion healthier meals to needy consumers in the U.S. over the next five years, nutrition education to four million U.S. households, more information on its labels about its food supply chains, and more work with suppliers to improve water usage and other environmental outcomes.

“It all comes down to trust,” McMillon said. “Customers have to trust us on food. When we focus on food, we are doing right by our customers, our communities, and our planet.”


Dale Buss

Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other business publications. He lives in Michigan.

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