Wal-Mart CEO: Spending less has upside

Scott speaks of 'fundamental change' in consumers' behavior, says retailers will feel more pain in 2009.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Parija B. Kavilanz, CNNMoney.com senior writer

lee_scott.03.jpg
Wal-Mart's outgoing CEO Lee Scott said retailers should expect to see a very challenging first-half of 2009.

NEW YORK (CNNMoney.com) -- Outgoing Wal-Mart CEO Lee Scott said the recession may have caused a "fundamental change" in the incessant shopping habits of Americans - which will hurt retailers but will benefit society as a whole.

Scott, citing his recent meeting with young shoppers, said many had given up eating out, going to the movies and shopping.

"Everyone has given up something and said how good they felt about it," he said. "I think in some ways it is healthy [for society], even though for us retailers it's not good."

Scott's remarks Monday were part of his keynote speech on the second day of the National Retail Federation's (NRF) four-day annual convention of retailers and suppliers in New York.

Scott also said the first half of 2009 will be "extraordinarily challenging," although he's confident that the government's efforts to stimulate the economy will help.

"We've all just lived through a tough Christmas. There are big issues facing retailers and the country as a whole," Scott said in what he termed as his "last public speech."

"We need bold decisive action to get the economy moving again and I am confident that the stimulus plan to pump liquidity into the economy will make a difference," he said.

But the turnaround in the economy isn't likely to happen anytime soon, he warned.

"I think the first half of the year will be extraordinarily challenging," he said. "The second half, [we're] hoping will be better, if only modestly."

In this environment, he said retailers need to have accurate understanding of customers' needs and tightly control their inventory.

Scott, who ends his 10-year tenure as Wal-Mart CEO on Jan. 31, was also asked about key lessons he's learned in his 30 years with the company.

"The big one is that you have to hire people who are better than you are and you have to give them credit," he said.

As an example, he cited Wal-Mart's $4 generic drugs program that was launched in 2006.

"What it's done for Wal-Mart and the country is incredible," he said. "But I had nothing to do about it. But I so much wanted to take credit for it."

"If you surround yourself with people better than you are, it's extraordinary what can happen," Scott said.

"On Jan. 31 when I turn off the light, I believe (Wal-Mart founder) Sam Walton will be proud of me and what my team has accomplished," he added. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Don't give my job to Staples Hundreds of U.S. Postal Service workers protested against experimental mini post offices at Staples. Here's why some Washington, D.C. workers don't like the deal. More
Tools to make your money grow You've started saving and built a financial base. Time for a few new strategies and tools to get your money to grow even more. From real estate to IRAs, here are some tips. More
Ready to start saving? Here's how to do it right When you are just starting out or finally starting to get serious about saving, the basics will get you far. Here are more than a dozen tips that will help you lay the base for building your net worth. More
Sponsors

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.