We Must Continue to Improve in 1989

By Sam M. Walton, Chairman

We’re just about to leave for Little Rock and Nashville for our Year-End Meetings with our Managers and Assistant Managers, as well as their spouses. This will probably be the last year we’ll be able to meet centrally, even at two locations. The logistics of travel and people are huge (over 10,000 this year) and is getting very difficult for our Wal-Mart team to handle. We’ve always said and proven that Wal-Mart can consistently perform the impossible and that we’ll never use that expression, “we’re just getting too big” to go things that have been important to us in the past, such as this year-end convocation with our management and their spouses. We have believed we are a family and, regardless of size, have tried hard to communicate and involve our families in this Company of ours. However, we will probably have to change the directions next year to regional type meetings. Hopefully, we can still handle them in such a way as to keep everyone involved and updated on our progress and our philosophies as we go forward, and simply be sure we are able to listen and have participation from all of our Wal-Mart management and their families. You know we’ll try real hard to do just that.

Now, let me try out a few subjects on you that will be uppermost on my mind as we approach these very important Year-End Meetings.

We’ve just come off of two real strong, almost unbelievable months. We were up in December and January over 13% in comparable sales. Wal-Mart is on a roll and I believe we’ll come in with excellent results for the year ending January 31, 1989. You all will really get excited over your profit sharing statements, as our stock spurted to a high for the year on January 31 in the 33-1/2 range which added to the contributions of $77 million that our Company will make to profit sharing. This means that most of our associates will see their profit sharing statements for 1988 appreciate in the range of 25%. That is some kind of a benefit for our Wal-Mart team and our families.

Our Company has received so much publicity, praise, and notoriety of late that I’m concerned we’ll believe we are as good as people say we are and lose some of the intensity and drive to constantly improve, which has always characterized our Company. You and I know full well we have all made enough mistakes in 1988 in all areas of our Company, and that by fully utilizing our Grass Roots Meetings with our associates and our “correction of errors” philosophy, we can make enough improvements in 1989 to enable us to have another record-breaking year.

So, the bottom line is: Our dedication must constantly be to serve our customers, our communities, our country, and our associates to the best of our ability, and involve all 215,000 of our people with their best ideas and efforts. If we do that consistently in all of our stores and facilities throughout Wal-Mart, this Company of ours will be strong and effective for years to come. Let’s start 1989 by resolving to utilize many of the directions that helped us so dramatically in 1988. I’m referring to these areas:

1. Store Within a Store. I feel a groundswell throughout Wal-Mart and Sam’s, because folks are beginning to believe and develop pride in that entire process. Department Managers are truly becoming Store Managers and Assistant Managers are becoming District Managers. Everyone is beginning to key in on training, teaching, and learning from each other. I’m really excited about how well our Store Managers and District Managers are also believing, performing, and supporting all of our associates in this most important program. Even though we’re entering only our third year on this Store Within A Store, you and I know it’s a pure winner for us, if we work at it and make it happen right. WE’VE ONLY JUST BEGUN!

2. The same is true for our Stretch Incentive Bonus Plans throughout Sam’s and Wal-Mart. You’ll all hear much about this great opportunity for us from our Managers and Assistant Managers when our Year-End Meetings are over. We’ve changed some of our guidelines and goals, but I’m convinced as I indicated in a recent memo that every one of our stores can achieve a bonus this year for our hourly associates. If they get exercised and develop and “over and above” performance for our customers and our communities.

3. In 1989, we must re-emphasize our determination to buy everything we possibly can in the United States of America – Bring It Back To the U.S.A.! We can develop an effective partnership with our suppliers and vendors. We can and must have as our objectives: (1) help reduce our trade deficit; (2) provide jobs and a future for our U.S. citizens, many of whom support us and are Wal-Mart customers.

4. Let’s accelerate “our promise we make is a promise we keep.” Each of you promised me in late ’88, and let’s renew the pledge now for 1989, starting tomorrow: “Every time our customers come within 10-feet of me, regardless of what I’m doing, I’ll look them in the eyes, smile, and greet them.” It’s real simple and if we all will do it, it will create real Wal-Mart magic and produce some unbelievable results as we go forward. Can we do it?

My friends, this is enough for one session. There is so much more that you all will suggest and can accomplish in this big year of 1989 coming up.

My bird season has been excellent – fewer birds than usual – and after these meetings, I’ll only have ten days remaining. I’m thankful and appreciative, though, of your making it possible for me to follow those dogs and get in as much quail hunting as I have. Bud and I also hosted three groups of our management teams in Falfurrias this year and, believe it or not, we call came back alive with no casualties – dogs or humans – thank goodness.

I’ll see you around, then hopefully, I’ll get back on my store visits soon. Maybe I’ll be heading your way. However, I don’t intend for you to know until you get that call from your local airport. Partners, good luck and thanks.

Sam Walton