John Furner, the relatively new CEO of Walmart U.S., is a Walmart lifer at 45 years old. He has logged 26 years at the retail giant, working his way up from an hourly employee who sought a part-time job while in college at the University of Arkansas in 1993.
Most analysts agree Furner — who was most recently CEO of Sam’s Club — inherited a business in good financial shape. That’s due largely to the turnaround efforts of Greg Foran, who spent five years in charge of the company’s U.S. division. Walmart is one of the darlings of Wall Street, with shares increasing in value more than 30% this year because of strong U.S. store and online performance.
Foran recently said there is still work needed in stores as demands from consumers are always changing. Under Foran’s tenure, Walmart ramped up its online grocery pickup service, improved the quality of private brands, reduced inventory and ushered in more technology to increase store efficiency and promote a more frictionless shopping experience.
Furner also has garnered praise from Wall Street analysts and Walmart President and CEO Doug McMillon, who recently said Furner has the “experience and judgment to know what we should continue doing and what we should change.”
Furner’s first day in the new role was Nov. 1, and he spent time in Store No. 100, where he held his first job at the retailer. He has been in stores several days a week meeting with employees and inspecting stores. He recently said his focus during his first 100 days on the job will be to guide the retailer through what looks to be a strong holiday. He said the momentum should continue into 2020. He will continue to focus on making Walmart a “great place to work and shop” by carrying out the merchandising plans already in place and integrating more technology to make shopping easier for busy families.
Some wonder if Furner will order more closures of underperforming stores, as he did shortly after signing on as CEO of Sam’s Club in early 2017. Walmart has quietly shuttered 20 stores in 14 states this year.
Foran said earlier this year about 50% of the stores were operating as they should, and the other half still need work in customer service, inventory levels, in-stock levels and assortment.
“We’ve sort of made some good progress, but the unvarnished truth is that we have not even gotten close to arriving,” Foran said in March. “For sure we are doing better, but our peers are still a long way ahead of us.”
Stewart Samuel, a retail analyst at IGD, said expectations are high for Furner given his track record at Sam’s Club. He said Furner has a full agenda scoping out the future for the network of more than 4,000 stores and looking at ways to further the omnichannel evaluation.
“With an average footprint of over 160,000 square feet, Walmart will need to consider what its optimal space requirements will be in the future,” Samuel said. “It has several options in terms of repurposing space including e-commerce fulfillment, new services, such as its recently launched Health Center, and leasing to relevant third-parties.”
Samuel also said Furner embraced technology at Sam’s Club and numerous technologies are being piloted at Walmart. Furner could accelerate those that have shown promising results.
“Expect to see a stronger push on improving in-store efficiencies, a key part of Furner’s focus during his time at Sam’s Club,” Samuel said.
He said Furner will also likely focus on balancing food evaluation with the low-price promise amid hyper-competitive pressures.
“The challenge for the retailer is balancing an enhanced foods experience with its value credentials,” Samuel explained. “While the product offering evolved significantly at Sam’s Club under Furner’s leadership, this was driven by its strategy to attract higher-income households. At Walmart, maintaining price leadership is essential as discount competitors continue to expand. Developing an offer at the intersection of an elevated fresh experience and value for money could be powerful for the retailer.”
He said Furner will need to work with Marc Lore, CEO of Walmart U.S. eCommerce, to continue building omnichannel capabilities. Work has already started on the building blocks of an ecosystem, including marketing, logistics, payment and financial services and digital entertainment.
“Combining them effectively could be a game-changer for the business,” Samuel said.
Samuel said Furner will also need to raise the fresh food game to keep up with Kroger, HEB, Albertsons and, who have each invested heavily in fresh food offerings and are fierce competitors.
Foran spent a lot of time redefining fresh food offerings in the past three years. Walmart’s new Fresh 2.0 concept will soon be rolled out, but Samuel said Furner will need to balance an enhanced fresh foods experience with its low price promises.
“Private label is also an area where Walmart can grow its food business, something which Furner was quick to address as CEO at Sam’s Club,” he added.
Mark Ryski, CEO of HeadCount Corp., said Walmart’s impressive results and pursuit of technology and innovation will likely continue under Furner’s leadership. He said there will be challenges to keep the business moving forward.
“The greatest challenges Furner faces will be to build on and advance an organization with the size and success of Walmart and continue to battle against Amazon at the same time,” Ryski noted in a recent RetailWire blog. “He also has the benefit of a deep and capable team of leaders and managers to help drive the business forward. I also think that Furner’s history within the organization, starting as an hourly associate and working his way up, gives him a unique perspective on all aspects of the business.”
Rich Kizer, a retail analyst and cultural anthropologist, said Furner is a general that has fought the fights himself. He said the biggest challenge will be to live up to huge expectations in short order.
Few retail analysts were surprised to see Furner get the recent promotion given his career trajectory. Furner has been a store manager, merchant buyer and merchandising officer at Sam’s Club and Walmart China. Like McMillon, he cut his teeth in retail while at Walmart. Furner’s connection to the business even predates his employment. His dad is a Walmart store manager.
Carol Spieckerman, CEO of Spieckerman Retail in Bentonville, said the selection of Furner for the role affirms Walmart’s preference for a seasoned corporate loyalist.
“His career has been cast in the come-through-the-ranks mold that defined Doug McMillon’s career,” she said. “It’s not a bad message to send as Walmart promotes career advancement opportunities for its associates. That’s not to say that Walmart hasn’t balanced that strategy and broken the mold by placing outsiders like Marc Lore in top roles. There are just so many top slots,” she said.
Spieckerman said Foran’s block-and-tackle strategies and focus on cleaning up unforced errors provided a counterbalance to Walmart’s digital forays, acquisition and experiments. She said as Walmart pulls back on the acquisitions it will be interesting to watch what the retailer does next.
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