Detail key to retail success

The most frequent questions he raised focus on a good mixture of margins and sales. But most importantly, Foran wants his associates to understand what matters to Walmart.

"The more they understand about that, the better decisions they make about what items they are going to sell in the store," he said.

His predecessor as head of the Chinese unit, Ed Chan, quit in October last year amid a pork-labeling probe that temporarily shut all 13 of the company's stores in Chongqing municipality in Southwest China.

Walmart said the reason it wanted to have a new leader is because it wants to take the stores to a new level, one of "excellence and being able to deliver on food safety and value" in even better stores, Doug McMillon, Walmart International president and CEO, said in February.

The company's fast expansion strategy in the past few years did not work well. Last year, Walmart China ranked No 4 in the top foreign chain retailer list in terms of revenue, after RT Mart, Carrefour SA and Yum! Brands Inc. The list was published by China Chain Store & Franchise Association in May this year.

To regain a balance in development and the confidence of staff and customers, Walmart is eager to showcase its return to "American values".

Unlike his predecessor, Foran does not have a Chinese face. But he brought the same Walmart culture that values "servant leadership".

At a meeting with Chinese employees marking the start of the year, he dropped down on one knee as a demonstration of that concept. "I was probably feeling tired after a long flight," he joked.

"We prepare fantastic merchandising in a clean way with the right display and excellent fresh food. But service at the checkout is important. A customer's total experience of a store can be affected by one final experience as he or she leaves at the checkout. We must have wonderfully trained and engaged associates. Servant leadership is the way forward for them to achieve that," he said.

Foran began his career with a part-time job stocking shelves at Woolworths in Australia at the age of 15, ultimately leading to his most recent role as head of Woolworths' supermarket division.

His career includes several senior roles within Woolworths including general manager of Big W, the discount department store division and Dick Smith, which specializes in consumer electronics.

In Foran's opinion, to lead the operations in the fastest-growing market in the world is "the opportunity to make a difference".

Walmart entered the Chinese market in 1996 and had 370 outlets by March. The market contributed less than 10 percent of Walmart International's sales revenue. China was one of the contributors to the highest dollar increases in Walmart International's net sales growth in 2012, which grew 15.2 percent to $125 billion in net sales.

Early this year, Walmart announced it will remain committed to allocating 60 percent of its funding to developing higher growth markets and 40 percent to developed markets, according to McMillon.

With high hopes for the Chinese market, Foran said he is hearing really positive things about Walmart in China and it will continue to open new stores - around 30 a year - and build new distribution centers and Sam's Clubs, named after founder Sam Walton, who opened the first store in 1962. Sam's Club is a chain of warehouse clubs that sell groceries and general merchandise, often in large quantities. Sam's Club outlets are "membership" stores. It is also the biggest private employer in the world with more than 2 million employees.

The opening of new stores in China is a reduction on the approximate 40 a year previously. Foreign retail giants in China are experiencing difficulties in maintaining growth. British retail giant Tesco Plc, the world's third-largest retailer by sales revenue, has closed four stores in China.

Thanks to the weak European economy, Carrefour SA, the world's second-largest retailer by revenue and owning around 210 stores in 64 Chinese cities, has also pulled back its fast expansion plans in the nation.

Zhao Ping, deputy director of the consumption and economic research department of the Chinese Academy of International Trade and Economic Cooperation, said it is smart for multinational retailers such as Walmart to slow down their expansion in China. She cited the tough global economic climate and weak growth in the Chinese economy and consumption as reasons.

As the economy tightens, Walmart's value in helping customers to save money presents a great opportunity for Walmart, Foran said.

However, he insisted: "We must never compromise the quality nor our price. We must always try our best. We must have low prices." Foran said he thinks the company's strategy of "every day low prices" and "every day low costs" is one of the key drivers that helps Walmart beat rivals.

Being a foreigner could be an advantage as Foran listens and observes. In addition to close research of his competitors, Chinese and foreign, Foran is also trying to understand local customers.

He has spent time shopping with three Chinese families. He found they live in a quite small apartment so getting out of their homes and going shopping is a social occasion. The discovery has convinced him of the value of running physical stores as well as e-commerce stores.

The move also helped him better understand the buying patterns of Chinese customers, for example, why fresh food is more important in China than general merchandise.

"The average size of an apartment in China is smaller than in the United States," he said. "People in the United States buy a lot of stuff because they have a lot of space. Fresh food in China is much more important than general merchandise."

Enhancing localization is a key to success for multinational retailers, which have a relatively low share of the overall retail market in China, said Zhao.

"Retail business operators face consumers directly. The more a company knows about the local market, the better they know what products and services they should provide, and the higher the customers' satisfaction."

Foran is proud that his job can help Chinese families to save money.

"It would be a fantastic legacy for Walmart to help millions of people to save money so they can live a better life. I'd like to be part of that," said Foran. "So that is what makes me get out of bed early and go to bed late at night."

wangzhuoqiong@chinadaily.com.cn