January 12, 2009 04:24 pm
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NEW YORK (AP) — Facing a litany of economic and financial challenges, retailers must work with government leaders to address health care, immigration, energy independence and environmental sustainability this year, departing Wal-Mart CEO Lee Scott urged retailers Monday.
“We need to tackle the hard issues,” Scott said at the annual National Retail Federation conference in New York. “As businesses, we have a responsibility to society.”
Scott said building shareholder value can coincide with solving people's problems, adding that he had seen it happen with Wal-Mart's $4 prescription drug program and his company's “Save Money, Live Better” campaign. And retailers are in a particularly appropriate position to think this way because they're close to the consumer, he said.
Scott said businesses cannot afford to wait.
He also said he is confident a government stimulus program will help the economy, though he does not expect improvement right away.
Scott predicted the first half of the year will be “extremely challenging” and the second half would be a little easier. But he thinks fundamental changes in consumer behavior — a penchant for saving more and spending less — will linger a while.
Retailers need to understand that, even though consumers still have money, they are focusing their spending.
Scott is stepping down as chief executive of Wal-Mart Stores Inc. on Feb. 1.
The four-day National Retail Federation convention, which ends Wednesday, comes after the nation's retailers reported last week that December's sales figures were dismal and made the 2008 holiday season the weakest since at least 1969.
Even Wal-Mart — which has been one of the few bright spots in the industry and has benefited as shoppers switch to cheaper stores and focus on necessities — has succumbed to the pressures of the weakening economy.
The discounter reported a smaller same-store sales gain in December than Wall Street expected and slashed its earnings forecast. Same-store sales, considered a key indicator of a retailer's health, are sales at stores open at least a year.
“We all had a tough Christmas,” Scott told the audience Monday.
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