CEO Profile: Michael T. Duke of Wal-Mart Stores Inc.

by Mark Friedman  on Monday, Mar. 26, 2012 12:00 am  

Mike Duke had a rough start to his tenure as CEO of Wal-Mart Stores Inc.

On Feb. 1, 2009, Duke became the fourth CEO in Wal-Mart’s history and quickly faced his first hurdle: The company’s plan to overhaul its stores already was under way, but the plan would soon backfire. The strategy called for the Bentonville retail chain to redesign stores by offering fewer items for sale and to reshape “Action Alley,” the place where promotional items were pulled off the shelves and displayed.

But Wal-Mart’s core customers, Americans who make $40,000 to $70,000 annually, didn’t like the changes and voted with their wallets, propelling sales at dollar stores like Dollar General and Fred’s.

The failed strategy showed up on Wal-Mart’s financial reports under same-store sales, a metric that compares sales at stores that have been open at least a year and a key indicator of a retailer’s health. For its fiscal year that ended in January 2010, Wal-Mart’s U.S. same-store sales were down 0.2 percent. For the fiscal year that ended in January 2011, same-store sales in the U.S. were down 1.6 percent.

“Wal-Mart focused on this fancy remodeling program and fancy apparel, and it’s totally off track with their whole business,” Howard Davidowitz, chairman of Davidowitz & Associates Inc., a retail consulting and investment banking firm in New York, told Arkansas Business in February 2011. “I think Wal-Mart has lost their way.”

Duke announced in February 2011 a four-point plan to improve U.S. sales, which included returning to its “Every Day Low Price” strategy. The plan seemed to have worked. For the most recent fiscal year that ended Jan. 31, same-store sales in the U.S. were up 0.2 percent.

“Our price leadership is making a difference across the United States, as many families are settling into a new normal,” Duke said in a Feb. 21 news release about the earnings. “Core customers remain cautious about their finances, and they rely on Wal-Mart’s [Every Day Low Price] promise to help them manage through today’s economic challenges.”

Grew Up in Georgia

Duke, 62, grew up in a rural county just southwest of Atlanta, according to a September 2010 article in Fortune.

His father drove a truck and his mother was a homemaker, the article said. Duke’s chores included tending the corn and tomatoes on his family’s land.

“I concluded at about 12 years old that I did not want to do that for the rest of my life,” Duke said in the article.

In 1971, Duke graduated from Georgia Tech with a bachelor’s degree in industrial engineering, according to The Associated Press. He then started his retail career in 1972 and worked for the next 23 years with Federated Department Stores and May Depart-ment Stores.

 

 

Please read our comments policy before commenting.