Wal-Mart CEO: Spending less has upside
Scott speaks of 'fundamental change' in consumers' behavior, says retailers will feel more pain in 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.