Wal-Mart: Mexico issue not likely to slow global growth

by The City Wire staff ([email protected]) 82 views 

ROGERS — The ongoing bribery issue in Wal-Mart’s Mexican subsidiary has not had a material impact on the retail giant’s customers and suppliers, according to Leslie Dach, executive vice president of corporate affairs for Wal-Mart.

Dach is one of several top executives addressing the media at this week’s shareholder events in Northwest Arkansas.

International CEO Doug McMillon told media representatives any details about the ongoing investigation could not be shared but he reiterated that “compliance with the Federal Corrupt Practices Act is very serious. We are not going to tolerate a lack of compliance in any country around the world or any level of this company.”

Revelations of the bribery scandal first hit April 21 when the New York Times reported a “campaign of bribery” that was allegedly managed by former Wal-Mart de Mexico CEO Eduardo Castro Wright. The bribery schemes allowed Wal-Mart to obtain construction and other permits quicker than its competitors.

Relative to compliance going forward, the company is trying to seize the opportunity to become stronger in compliance across the board as it relates FCPA and other areas such as food safety in China, McMillon said.

“A moment like this causes you to be on your toes and look for opportunities to get stronger anywhere that you can. And that is what our objective is,” McMillon told a room full of journalists covering the event.

“We continue to stress how important integrity is. It’s a core value of the company. We are reaching out to our 800,000 global associates and asking them to take ownership in their businesses and look at their area and level of responsibility,” he added.

McMillon doesn’t expect any impact from the investigation hindering new store growth internationally.

“We will see, only time will tell,” he said.

He said expansion in China and Brazil have slowed, but it’s not related to the FCPA issue.

WIth respect to China, McMillon says they are preparing to unveil the “everyday low price” (EDLP) strategy there sometime next year. However, he said the company rushed to build stores in China and place some in non-optimal locations and now company officials are looking to site better locations — single story venues — that are more conducive for shopper-friendly layouts.

In Brazil, McMillon said the company is in the midst of implementing EDLP and plans to improve the operations in stores that it now has, before it opens any more.