Next Wal-Mart CEO faces challenges Sam Walton never saw

Favorite Candidate

“It’s my understanding that the Walton family continues to have a lot of input, so if they have a favorite candidate, that would affect who’s chosen,” Lorsch said. “Wal-Mart has pressures, especially the allegations of bribery in Mexico --and the next CEO is likely going to have to deal with this.”

During Duke’s tenure, Wal-Mart shares have lagged behind the Standard & Poor’s 500 Index. Wal-Mart advanced 67% from the last trading day before Duke took over through yesterday, compared with a 97% increase for the S&P 500.

Wal-Mart’s shares, which had earlier rose as much as 0.4%, erased their gains yesterday after the Bloomberg News report on the potential CEO candidates and closed unchanged. The shares rose 0.2% to $78.50 at 9:50 a.m. in New York.

Early in Duke’s tenure, Wal-Mart moved into Target Corp.’s space by trying to make stores more inviting and easier to shop. As part of an effort to de-clutter stores, the company removed thousands of items from shelves.

Inauspicious Timing

The timing wasn’t auspicious. When the U.S. tipped into recession, many Wal-Mart customers who’d long done all their shopping in one trip at their local supercenter could no longer find everything they needed. Many defected to the dollar stores, which were busily adding groceries to their assortment.

Wal-Mart was forced to reverse course and return thousands of items to the shelves. With same-store sales sliding, the company began cutting its workforce, even as it opened more supercenters. A new challenge emerged: Keeping shelves stocked.

Once a paragon of logistics, Wal-Mart has been trying to improve its restocking efforts since at least 2011, hiring consultants to walk the aisles and track whether hundreds of items are available. It reassigned store greeters to replenish merchandise. At a February meeting of U.S. executives Simon said “self-inflicted wounds” were Wal-Mart’s “biggest risk,” according to minutes obtained by Bloomberg News.

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