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    Saturday, April 27, 2024

    Wal-Mart's new U.S. chief faces bare shelves, surly shoppers

    New York - Empty shelves, grumpy customers, long lines at the register: These are just some of the challenges facing Wal-Mart Stores Inc.'s new U.S. chief.

    Greg Foran, who takes charge Aug. 9, inherits a chain wedded to an outdated big-box model, struggling to increase sales in its stores and online, and losing customers because it can't keep stores adequately stocked. The sluggish U.S. performance contributed to lower-than-projected sales and profit in the quarter that ended April 30. Wal-Mart's profit forecast for the current quarter also came in lower than analysts' estimates.

    By naming Foran, a 53-year-old New Zealander who previously ran the chain's Asia operations and has worked at Wal-Mart only four years, Chief Executive Officer Doug McMillon is betting a relative newcomer can revive a company losing relevance in a world increasingly dominated by Amazon.com.

    Foran's promotion is "an acknowledgement of needing fresh thinking," said Bryan Gildenberg, an analyst at Kantar Retail in Boston. "There are some short-term execution issues that McMillon is trying desperately to fix."

    Foran comes to the job with more than 30 years of retail experience in operations, merchandising and marketing. He previously headed Woolworths Ltd.'s supermarket division and held other senior roles at the Sydney-based company, including general manager of the Big W chain of discount stores.

    He joined Wal-Mart in 2011 and became head of the China business in 2012. Foran was tapped for the Asia CEO job after revamping operations, pricing and product assortment in the Chinese stores.

    David Tovar, a Wal-Mart spokesman, said executives throughout the company have been impressed with Foran, and that's why he was promoted in Asia shortly before being named to the top U.S. position.

    "Foran has a lot of experience on the operations side," Gildenberg said. "He had a lot of focus on store-level experience and improvement. He spent a lot of time in stores and with store management. He's an operator at heart."

    Foran has much to fix. With Wal-Mart's low-income customers still living from paycheck to paycheck, the company hasn't posted positive same-store sales for the past five quarters, according to data compiled by Bloomberg. A reduction in food stamp payments has also weighed on Wal-Mart sales. The shares have fallen 3 percent this year, compared with a 7.6 percent gain for the Standard & Poor's 500 Index.

    "It's not like U.S. operations are lighting the world on fire," said Brian Yarbrough, an analyst at Edward Jones & Co. They've "obviously struggled."

    While Wal-Mart faces increasing competition from a host of players, including Amazon and the dollar stores, some of its stumbles have been self-inflicted. Last year, Bloomberg News reported that many items were not being replenished, leaving some shelves bare. Hundreds of emails poured in from once-loyal customers complaining they could no longer find what they were looking for and so were shopping elsewhere.

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