Published on: December 15, 2008Lee Scott, the outgoing CEO of Walmart, appeared yesterday on NBC’s “Meet The Press” as part of a panel discussion about the state of the nation’s economy. (Also appearing were Michigan Governor Jennifer Granholm, former Massachusetts Governor Mitt Romney, former Hewlett Packard CEO Carly Fiorina, and Google CEO Eric Schmidt. The panel was moderated by David Gregory, the new permanent host of ‘Meet The Press.”)
One of the things addressed by Scott was the trend in consumer spending, at least as seen by Walmart: “In our business we're focused on customers, we're focused on everyday needs of middle-class America, working people,” he said. “And so what we are is in touch with what's happening out there in this economy on an everyday basis. An example would be we're seeing right now these Walmart moms, they're spending their money against their children's needs and their family's needs and deferring their own purchases. We're seeing people buy more and more food, particularly frozen food. In our Sam's Clubs, we're seeing the small business, particularly the restaurant owner, who's visiting the club multiple times a week as yesterday's cash flow allows them to purchase … for tonight's business.”
At another point in the discussion, Scott talked about consumer concerns in these tough economic times: “What we're seeing is, in our surveys and interfaces with the customers, which we do extensively every month, is that energy costs have clearly dropped. I noticed on my way in here this morning gasoline here is $1.339, so that's moved down. We're seeing, though, that, that our customers have a great deal of faith that government will ultimately take the right action and be successful in addressing the current situation, but the number one issue today is their concern about their job. And that is, that is clear.
“You can see, across our store, things--in our pharmacy group, we have increases in prescription drugs, but not at the same rate it was. And what we're seeing is an increase in self-treatment. We're seeing an increase in food storage as people are cooking more at home. And, in fact, using leftovers more extensively. So consumers are, in fact, changing their behavior.”
Scott also called for a contextual approach to addressing the current economic crisis, one that would involve both business and government, and that would acknowledge that there is a linkage among seemingly disparate elements of the national life.
“Certainly, the next few months, are going to be very challenging,” Scott said. “But we, we believe there's an opportunity here to not just address this challenge and this crisis, but what are we going to do as a country so we emerge from this crisis as a stronger America? So are we going to address comprehensive healthcare reform … or are we going to have a national energy policy? What are we going to do about education? Because if all we do is this one package, and we don't address the rest of it, what will keep us from coming right back to the same situation?”
And, he added, “Any business or anyone today who's putting their interests ahead of this country, I think, is just on the wrong track. And, and we get, quite honestly, some people who, who say that we shouldn't be pushing for this energy policy and for this reform in health care, that Walmart shouldn't be involved in that. I think they're just wrong. I think today, more than ever, we have a responsibility to participate, and I don't mean on a negative side of participating by just being critical of what's proposed, but by being a partner in these solutions.”
- KC's View:
- Watching “Meet The Press” yesterday morning (a Sunday ritual in the Coupe household), I was taken by the fact that none of the panel participants – and they reflected a broad political spectrum) seemed to disagree very much about the need for contextual, comprehensive government intervention that would, nevertheless, hold companies and industries accountable if they take advantage of taxpayer money. Maybe that’s a good thing – if people of different parties and different political persuasions can agree in principle on what we ought to do, then maybe we really can, as Scott said, “emerge from this crisis as a stronger America.”
It also was very interesting that when asked about the housing crisis and the role that government ought to play, Scott said, “It's hard for me to be critical of government intervention in the mortgage business, since my wife and I got our first house in the early '70s through a 5 percent tax rebate that came from buying a $30,000 home … And that $1500 we got back from the government was, in fact, our down payment. And I thought--quite honestly, I thought that was a very effective way to give myself and my family the opportunity for home ownership and to do it in a very constructive way. I think back then the interest rate was 8.75, so it wasn't that attractive. But I think there is a role that government can play.”
There will be some Walmart haters who will disagree with me on this, but I think the maybe one of the reasons that Lee Scott ultimately has done a good job for Walmart – despite some trying times and even some missteps – is that he remembers that first house, that first down payment, those early struggles.
Not enough people – whether political or business leaders - do. Or maybe not enough of them have had early struggles, which is why they find the current situation so perplexing.
Just a thought.