Wal-Mart vice chairman pledges more diversity, advancement in workforce in speech at meeting

Wal-Mart pledges more diversity, advancement

FAYETTEVILLE, Ark. — Wal-Mart Stores’s Vice Chairman Eduardo Castro-Wright promised shareholders at its annual meeting Friday that it will press for more diversity in its workforce and create more career opportunities for advancement.

“In the year ahead, we will take bold steps. We will not confuse efforts with results,” Castro-Wright told cheering shareholders packed into a University of Arkansas arena for the company’s annual meeting in Fayetteville, about 30 miles from its headquarters in Bentonville, Ark. Without offering specifics, Castro-Wright said that the company will do more to help associates, including hourly associates, advance in the workforce and get competitive pay.

Wal-Mart has been one of the few bright spots in retailing as it steals market share and customers away from rivals. But as the nation’s biggest private employer, it is under pressure by labor-backed critics to keep improving its labor practice, though criticism has diminished recently.

Castro-Wright says that 40 percent of regional general managers are “of color.” Twenty percent of that group are women.

Still, this year’s annual meeting was even more of a celebration than an opportunity to respond to attacks as the company has made efforts to improve its image and business practices with moves to cut waste from operations and to reduce health care costs through its store clinics. It has also benefited enormously as shoppers have switched to cheaper options in a recession.

The company, which generated more than $400 billion in sales last year, has pulled shoppers away from rivals around the globe because its re-emphasis on low prices along with the right mix of merchandise and marketing have come together just as the economy went sour.

Even entertainer Ben Stiller, the host of the meeting, took the opportunity to take a jab at Target.

“You guys get up early,” said Stiller, referring to the 7 a.m start of the meeting. “I hear they are still sleeping over at Target.”

The meeting was also peppered with appearances by such celebrities as basketball legend Michael Jordan and “American Idol” winner Kris Allen.

Wal-Mart’s earnings and sales performance continues to be a standout compared with the retail industry. Including Wal-Mart, the same-store sales index from the International Council of Shopping Centers-Goldman Sachs has averaged a 0.5 percent decline from February through April compared with last. Without Wal-Mart, the industry index would have fallen 4 percent. Sales at stores open at least a year are considered a key indicator of a retailer’s health. Starting with May results, Wal-Mart is no longer reporting monthly sales results.

“Winning feels good, doesn’t it?” Castro-Wright told the cheering crowd on Friday.

Similarly, first-quarter profits fell 12 percent this year compared with last year industrywide. Excluding Wal-Mart’s positive results, industry profits would have dropped 17 percent, though the gap between Wal-Mart and the rest of the industry has narrowed as merchants increase cost-cutting, Ken Perkins, president of RetailMetrics, said.

Still, after enjoying a 20 percent surge in its stock price in 2008, Wal-Mart has seen its shares fall 7.5 percent so far this year as Wall Street turns to retailers that sell more discretionary goods and could benefit when the economy improves. That has driven up share prices for such merchants as Macy’s Inc. and Minneapolis-based Target, both of which suffered steep share declines in 2008.

The challenge for Wal-Mart is to make sure new shoppers stay when the economy recovers.The retailer has cleaned up its stores, upgraded its customer service and spruced up its merchandise. But it also continues to move foward with an aggressive remodeling of its stores, which includes a better display of electronics and lower shelves that will enable shoppers to navigate the store more easily. The company plans to remodel 500 of its more than 3,600 stores in the U.S. this year.

The company is also launching more exclusive launches in apparel and home furnishings that should help shoppers buy more than just detergent and groceries. Earlier this week, the company launched a new fashion line with teen star Miley Cyrus and BCBG designer Max Azria for the critical back-to-school shopping season.

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Chuck Bartels contributed to this report from Little Rock, Ark.