Hank Mullany: Wal-Mart Poised For Major SuperCenter Expansion

March 2008

Hank Mullany, Wal-Mart’s senior VP and president of its Northeast division said that his company is targeting the 13 state area (from Maine to Virginia) for aggressive SuperCenter growth over the next few years. Mullany made his comments at the Association of Manufacturers Representatives (AMR) meeting held on March 13 at the Radisson Valley Forge Hotel in King of Prussia, PA.

The former Genuardi’s president said that in 2008, 22 Wal-Marts would open in the division (primarily SuperCenters), including combo units in: Willow Grove, PA; King of Prussia, PA; Uniontown, PA; Duncansville, PA; Deptford, NJ; Vineland, NJ; Edison, NJ; Middletown, DE; Front Royal, VA; Martinsburg, WV; Hurricane, WV; and Severn, MD (which opened on February 5). Additionally, Wal-Mart will open its first Neighborhood Market in the region later this year in Norfolk, VA.

Next year, new Delaware Valley SuperCenters are slated for Fairless Hills, PA and Norristown, PA.
Mullany said that in recent years Wal-Mart has become more versatile with its SuperCenter model and, while most will be in the 200,000 square foot range, some of the new combo units could be as small as 150,000 square feet.

Much of Mullany’s speech was devoted to explaining Wal-Mart’s new more decentralized go-to-market approach. He told the group, primarily composed of direct store vendors, that Wal-Mart is targeting food as being of continuing importance in its growth strategy. He pointed to the retailer’s perishables program as being a priority. Upgraded fixtures and improved merchandising are being rolled out in the company’s produce departments and Wal-Mart is also partnering with agriculture departments in many states to develop “locally grown” produce programs. The chain has also unveiled a new meat program, offering select, choice and Angus grades to its shoppers

While procurement decisions are still made at corporate headquarters in Bentonville, AR, Mullany noted the Northeast division, based in Ewing, NJ, had the clout to influence buying and merchandising opportunities for regional vendors.

That might seem surprising to some given Wal-Mart’s centralized infrastructure, but Mullany noted that his company recognizes regional differences in buying habits. And certainly by its size, the territory that the Temple University graduate oversees is large enough (more than 25 percent of the U.S. population) to warrant individualized attention.

The Northeast division is made up of 579 Wal-Marts (Sam’s Club is a separate operating unit) and employs more than 175,000 associates. Ten of the 13 states that encompass the division have senior citizen populations that are larger than the national average.

Mullany’s coverage area is one of five national divisions. There are 25 regions within those divisions and 360 national markets that fall under those 25 regions. Functions such as finance, human resources, corporate affairs and merchandising fall under each division’s umbrella.

Mullany addressed some issues that Wal-Mart has been criticized about in recent years. He noted that 92 percent of Wal-Mart’s employees are now covered by some form of health insurance, either directly by Wal-Mart or through other plans. He stated that Wal-Mart is becoming a leader in the area of sustainability, asserting that the world’s largest retail chain is working hard to have all of its stores totally supplied by renewable energy and also is implementing programs that will create zero waste.

On the subject of employee compensation, Mullany said that a review of the facts indicates that Wal-Mart is not only a fair employer in terms of wages and benefits, but the desire by many to join the organization can be seen when the company opens new stores. He added that it is normal that more than 1,000 applications are received for a new store that typically employs 300-400 associates. Mullany also said that Wal-Mart contributed more than $1.1 billion last year to associates’ 401(k) or related profit sharing plans.

And Mullany stated, “While we are not America’s most profitable company, we are the largest corporate giver,” noting that $35 million has been donated to charitable and philanthropic causes in Pennsylvania alone.
In closing, the veteran retail executive noted that Wal-Mart’s prime focus will always be on offering the lowest prices to its consumers. Other targeted areas include improving the in-store experience and consistently driving quality and value.

He added that three major corporate platforms have been established by Wal-Mart CEO Lee Scott that will be aggressively pursued in the near term. Those include: making health care more affordable and accessible (including offering more $4 prescriptions); reducing energy costs for its customers; and becoming more ethically and environmentally responsible on a world–wide basis when dealing with its suppliers.
nk Mullany, Wal-Mart's senior VP and president of its Northeast division said that his company is targeting the 13 state area (from Maine to Virginia) for aggressive SuperCenter growth over the next few years. Mullany made his comments at the Association of Manufacturers Representatives (AMR) meeting held on March 13 at the Radisson Valley Forge Hotel in King of Prussia, PA.