Walmart CEO Doug McMillon on supply constraints

Walmart CEO Doug McMillon says retailer is seeing product stock levels improving and how it is handling holiday sales.

Video transcript

DOUG MCMILLON: There's been a lot of change as we've gone through this year. As you know, our first priority is to keep our associates safe. Our second priority is to keep the supply chain moving and drive in stock. As you know, we've been challenged in a number of categories. And that continues to be the case in some instances.

Our third objective has been to try and help others with our stores being open and the company having cash flow. We've made decisions to support people that lease space in our stores, to hire more people, things like that. Fourth, make sure we manage this business well through the crisis.

And then fifth, with the bandwidth that's available after that, make progress on our strategy and move forward with what our goals were when we started the year.

BRIAN SOZZI: Talk to us on managing the business. How do you turn a company Walmart's size on a dime inside an environment a retailer has never seen before?

DOUG MCMILLON: Yeah, It's been impressive. I have really appreciated how all of our associates have responded, our leadership team included. They made decisions so quickly and continued to when new information's made available. Things to, you know, make it safer to shop in our stores, things to improve the safety of our e-commerce fulfillment centers.

Just time after time, cycle times have really picked up. What might have taken us weeks and months to do before, we're doing in hours and days. And it's been amazing to see.

BRIAN SOZZI: Are the product out of stocks, are they over? It's not just cleaning materials, it's food. I'm in these stores, and it's not just Walmart, it's grocery stores, the demand has been so strong. What is driving that, and when does it stop?

DOUG MCMILLON: Things are getting better. But we still have a ways to go to recover. And I think it's going to be a bit choppy for months to come as we all deal with the volatility and as things change. And as you know, there are virus counts changing locally that cause different behavior locally. So what you see is unique to the location that you're in.

But our team is really focused on in stock, the number of receipts that we have versus that we've sold in the last few weeks and months has been greater. So we're seeing in stock levels improve. But as we went through the year, you could see people kind of moving together. Families were at home more, they were watching the news, they were making choices about what they needed to solve for.

So we saw that initial stock up phase that was paper goods and dry grocery and things to keep you safe and keep you fed. That moved to educate my children, help me entertain the family while we're at home. Then we saw as the spring and summer went through bicycles, things related to the outdoors, like your backyard and the lawn. All those things happened.

And today, what we're seeing is there's been some leveling out. But with the case count coming back up, there are some areas where we're starting to see stock up behavior again locally.

BRIAN SOZZI: Talk us about that a little more, Doug. Do you think there will be-- a lot of these products will come back in stock for the holiday season? How will those supply chain pressures impact holidays?

DOUG MCMILLON: Well, our teams had some time to react now, and our suppliers have too. So, you know, if you go back to what we were seeing in May, for example, we started to think about what holiday was going to look like and what we needed to adjust for holiday way back then. So we made a number of changes.

One of the kind of big set of changes is related to how we're going to handle the sales around Thanksgiving, Black Friday and that event. You know, we're basically at Walmart trying to spread out those sales over more time and to drive them more to e-commerce and to conduct those sales in a way that's safer for everybody. So spread out the store volume, try to reduce the pressure that we feel in terms of crowds and stores, and take more care of them through e-commerce and by spreading out the volume in stores.