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Michael T. Duke
Wal-Mart Stores Inc.
Mike Duke had a rough start to his tenure as CEO of Wal-Mart Stores Inc.
On Feb. 1, 2009, Duke became the fourth CEO in Wal-Mart's history and quickly faced his first hurdle: The company's plan to overhaul its stores already was under way, but the plan would soon backfire. The strategy called for the Bentonville retail chain to redesign stores by offering fewer items for sale and to reshape "Action Alley," the place where promotional items were pulled off the shelves and displayed.
But Wal-Mart's core customers, Americans who make $40,000 to $70,000 annually, didn't like the changes and voted with their wallets, propelling sales at dollar stores like Dollar General and Fred's.
The failed strategy showed up on Wal-Mart's financial reports under same-store sales, a metric that compares sales at stores that have been open at least a year and a key indicator of a retailer's health. For its fiscal year that ended in January 2010, Wal-Mart's U.S. same-store sales were down 0.2 percent. For the fiscal year that ended in January 2011, same-store sales in the U.S. were down 1.6 percent.
"Wal-Mart focused on this fancy remodeling program and fancy apparel, and it's totally off track with their whole business," Howard Davidowitz, chairman of Davidowitz & Associates Inc., a retail consulting and investment banking firm in New York, told Arkansas Business in February 2011. "I think Wal-Mart has lost their way."
Duke announced in February 2011 a four-point plan to improve U.S. sales, which included returning to its "Every Day Low Price" strategy. The plan seemed to have worked. For the...