BOSTON — Wal-Mart has started decentralizing and streamlining its $191 billion U.S. store division as the discounter seeks to improve the shopping experience with more consistent merchandise presentation, better service and cleaner stores.
The company has reoriented its regional divisions, grouping stores into nine operating units. Previously, divisions were defined by store count and sales volume "without much rhyme or reason," Pat Curran, executive vice president, operations for Wal-Mart U.S., said during presentations to analysts at the retailer's annual conference in Rogers, Ark.
Regional general managers, replacing an old regional vice president position, will gain more autonomy and leave the Bentonville, Ark., headquarters to move into their markets. They will be joined by a team that includes operations support and financial mangers, both new roles, as well as staffers from real estate, finance, loss prevention, human resources and legal compliance, positions that have been traditionally based in Bentonville.
"Our people are spending way too much time on nonproductive work, plain and simple," Curran said. "Too little ownership on the regional management level side of it, not being able to function outside of their silo to make decisions that impact the business."
John Menzer, vice chairman in charge of Wal-Mart U.S., said the changes will have a net result of requiring fewer people and reducing expenses. The company did not specify which positions were to be eliminated.
"We will have a more nimble organization, one that's very focused with high accountability," he said. "For the first time, we're now in the process of building from our business plan from store level up."
Traffic has been down in U.S. stores over the last nine months. Aftertax operating profits have declined as expenses related to fuel prices and labor costs have risen. The retailer has said it stumbled scheduling shifts, adding more associates to its sales floor than sales required.
Menzer, who established country-based operating groups while running Wal-Mart International, described the regional general manager as "becoming almost country-like presidents ... with a lot of autonomy."
The district manager position has been renamed market manager, who reports to the regional general manager and has wage management and compliance with state employment laws as primary responsibilities.
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