Outgoing Walmart CEO Doug McMillon speaks in Bentonville, Ark., in September. Under McMillon, Walmart’s annual revenue has grown from US$485.7-billion to US$681-billion.Charlie Riedel/The Associated Press
Walmart Inc. CEO Doug McMillon, who turned America’s largest retailer into a tech-powered giant and spearheaded a period of robust sales growth since becoming chief executive in 2014, plans to retire early next year, the company said Friday in a surprise announcement.
John Furner, 51, the head of Walmart’s U.S. operations, will take over on Feb. 1, the day after Mr. McMillon’s retirement becomes effective, the company said. Although Mr. McMillon is set to spend a year advising his successor, Walmart WMT-N shares fell 3 per cent immediately in premarket trading after the news of the unexpected leadership change.
Unlike Amazon’s Jeff Bezos or Tesla’s Elon Musk, Mr. McMillon isn’t a household name, but he played a key role in the U.S. economy. Walmart’s performance serves as a barometer of consumer spending given its size and vast customer base. The company maintains that 90 per cent of U.S. households rely on Walmart for a range of products, and more than 150 million customers shop on its website or in its stores every week.
Walmart also is the country’s largest private employer, with 1.6 million workers.
The pending CEO switch comes at a challenging time for retail companies and other employers that have spent almost 11 months navigating an uncertain economic environment as President Donald Trump’s administration adopted volatile policies on tariffs and initiated an immigration crackdown that threatened to shrink the supply of workers.
Doug McMillon, right, speaks with John Furner, left, in a Sam's Store in November, 2018, when they were CEO and VP regional general manager of the Walmart warehouse chain.Ray Stubblebine/Reuters
Mr. McMillon started with Walmart in 1984 and became chief executive three decades later. During his tenure as CEO, he invested heavily in employees by increasing wages, expanding parental leave and launching a program for employees seeking advancement and education opportunities to earn certificates and degrees.
Under his leadership, Walmart has been laser-focused on maintaining low prices while embracing new technology such as artificial intelligence and robotics.
“Over more than a decade as CEO, Doug led a comprehensive transformation by investing in our associates, advancing our digital and e-commerce capabilities, and modernizing our supply chain,” Walmart chairman Greg Penner, the son-in-law of the late Walmart founder Sam Walton, said. “He leaves Walmart stronger, more innovative, and better aligned with our purpose to help people save money and live better.”
Mr. Furner started at Walmart in 1993, working as an hourly store associate in Bentonville, Ark., where the company is based. He served as president and CEO of the U.S. division of Sam’s Club, the membership warehouse-store chain that Walmart owns, before taking the same roles at Walmart U.S.
Under Mr. McMillon, Walmart’s annual revenue has grown from US$485.7-billion ($680.90-billion) to US$681-billion ($954.71-billion) in its latest fiscal year. Its stock was hovering around US$25 per share when he came to the helm; now, it is more than US$102.
When he became CEO, stores were messy and worker morale was low. Mr. McMillon thought the company needed to increase pay and create pathways for hourly workers to advance in their careers. In 2015, Walmart announced a three-year, US$2.7-billion ($3.79-billion) investment to increase wages and create new education and training opportunities.
But when Mr. McMillon briefed investors that year and cut the annual sales forecast, investors weren’t happy, sending Walmart shares down and destroying US$21.5-billion ($30.14-billion) in market value in hours. The company gradually regained investors’ confidence with higher sales, new customers and greatly improved employee retention rates.
Walmart also invested heavily in e-commerce and faster deliveries. The company said in August that roughly one-third of recent deliveries from its U.S. stores involved orders asking for goods to arrive in three hours or less, and 20 per cent of those orders made it to customers in a half-hour or less.
Walmart has also looked for new sources of revenue such as advertising and launched a membership program called Walmart+ to compete with Amazon Prime, its rival’s free-shipping program.
During the coronavirus pandemic, Walmart powered through worldwide supply chain kinks and saw a sales surge as homebound consumers stocked up. Walmart used its clout with suppliers again to maintain low prices and attract more customers during the period of inflation that followed the pandemic.
The company has said it is absorbing some of the extra import costs from Mr. Trump’s tariffs on foreign goods but that customers would see some price increases.
“We’re doing what we said we would do,” Mr. McMillon told stock analysts in August. “We’re keeping our prices as low as we can for as long as we can. Our merchants have been creative and acted with urgency to avoid what would have been additional pressure for our customers and members.”