Recession preparation, ChatGPT, sustainability and more
On Wednesday, Walmart ( WMT ) held its annual shareholder meeting where thousands tuned in, virtually and in person, to hear about the state of the nation’s largest company, which produces annual sales of about $611 billion worldwide and employs about 2.1 million workers or, as it calls them, associates.
Here are some key highlights:
Recession? Walmart executives are preparing.
Chief Financial Officer John David Rainey called the practice “part of our normal planning process” in a Q&A during the shareholder meeting, saying: “We are considering a number of opportunities, economic environment.”[ads1];
“We want to make sure that we’re not only addressing the need to maximize revenue and profit, but also looking at our balance sheet, making sure we have access to capital at the lowest possible cost, which we did when we entered the market earlier this year,” he added.
Why the concern? “Consumer wallets are squeezed and that affects … what they buy,” Rainey said.
Price cut: CEO Doug McMillon told shareholders that some relief may be on the way for customers. To stay ahead of the competition, Walmart aims to cut prices in an environment where megacorporations have been accused of overcharging to boost profits.
Said the CEO: Walmart “is trying to work hard right now, as we’ve been doing for quite some time now, with our suppliers to get our prices down.” However, McMillon was bullish: “We believe the company is positioned to succeed regardless of the environment.”
So far so good. Compared to a year ago, Walmart stock is up more than 14%.
Customer Obsessed, Tech Obsessed: “At the end of the day, we’re a technology company, but we’re not a traditional technology company. We’re here to solve real problems for real people,” said Anshu Bhardwaj, Walmart’s senior vice president of technology strategy and commercialization.
AI, or artificial intelligence, is a major area of focus – and investment. Walmart, for example, is testing a conversational platform nicknamed “Converse” to answer product-related questions on its website. In other words, a “dedicated shopping assistant”.
For example, a shopper might say, “I’m interested in looking for a cell phone for a 10-year-old,” then chatGPT will reveal four criteria when buying a cell phone for a 10-year-old, such as safety and parental controls. Then, when the customer has placed the phone in the basket, the shopping assistant will ask if they also want a durable case.
Converse was introduced back in 2020, but the world is more aware of it now thanks to ChatGPT, which Cheryl Ainoa, Walmart’s EVP of new businesses and emerging technology, called a “tipping point.” She added: “The reason is that it brought the ability to engage with AI to anyone. You don’t need a computer science degree.”
Bhardwaj said the question employees ask is, “How can I make my job easier [with AI] and use it across the entire company?”
Walmart wholesale retailer Sam’s Club uses the Converse tool for its digital AI assistant, “Ask Sam,” which allows employees to ask questions and translate languages, among other tools.
Does not say: There were nine shareholder proposals – they all failed. The proposals ranged from a “Communist China Risk Audit” and limiting contributions made by Walmart’s PAC to requesting a “Racial and Gender Layoff Diversity Report.”
Eyebrow lift: The company’s roughly 3,700 pharmacists will now have an average annual salary of $140,000 or so. This comes on top of the increases that took place last year. Based on Indeed data, the current professional average is approximately $118,081 per year. Walmart also raised wages for more than 4,000 opticians, with expectations that the average wage will be $22.50 an hour. No further details were provided.
Health: Walmart is investing heavily in its health and wellness business. By the end of 2024, Walmart will have more than 75 health centers in the US in states including Texas, Arizona, Kansas, Missouri and Florida.
Getting greener: Walmart is moving from plastic to recyclable paper mail and using technology to get the right size of the cardboard packaging. It also gives customers the ability to opt out of bags for pickup orders and the ability to consolidate shipping orders, as Amazon ( AMZN ) does. However, unlike Amazon, there are no incentives, such as credits, to encourage customers to make the “sustainable” choice.
As a result of the switch, Walmart will eliminate over 2,000 tons of secondary plastic packaging and 65 million postal items of plastic bags when the switch is rolled out through the end of this financial year. Properly sized packaging is also expected to enable the company to load more boxes into trucks and thus reduce shipping miles.
Star-studded lineup: On Friday, Walmart wowed the crowd of shareholders and employees from Sam’s Club, Walmart US and Walmart International, including employees from China for the first time in four years, with quite a few A-list celebrities. Shania Twain started the celebration, followed by host Kevin Hart. Other performers include John Legend, Snoop Dogg, Rachel Platten and Pitbull. Chris Hemsworth and Chris Evans also made guest appearances, while Tom Cruise recorded a video for the event.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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