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Turnover! Return on Investment! Those are two phrases...

Turnover! Return on Investment!

Those are two phrases that may not mean very much to many of us in our two thousand member Wal-Mart family.

But starting today – now – this week, total commitment is needed from every one of us: from Jerri Whitten and Gary Mohr and their fifty-nine associates in the Wal-Mart Distribution Center; from Frankie Woods and the other thirty-two employees at Store #33 in Nashville; from Thelma Wilson and her fifty-three co-workers at Store #7 in North Little Rock; from Grace McCutcheon and the other department heads at Store #2 in Harrison; from Keith Payne and his fellow workers in IBM; from Don Bailey, Buyer, and all others in the Merchandising Department; from Keith Binkelman and his crew in Advertising; from all the Store Supervisors; from myself and others on our Executive Committee including Ferold Arend, Ron Mayer, Claude Harris, Don Whitaker as well as Jack Stephens, H. L. Remmel, Jim Jones and other Board Members of Wal-Mart.

This is what we need to do. As a Company we need to increase the number of times we turn our inventory in a year from 4.2 at retail to 5.2 in 1972 and 6.2 in 1973. To do this we must start now – today. Understand, we’re above the average for discount store chains in the U.S., as the national average according to the Cornell Study conducted by the Mass Retailing Institute is 3.7. We’re number one in most categories, but we won’t be satisfied with less than number one in return on investment and turnover.

5.2 IN 1972

A complete program for increasing turnover will soon be presented to each of us. Very simply it means we have to get maximum sales with minimum inventory of merchandise. To do this all slow moving items in every department must be identified and eliminated. We must order smaller quantities but order more often.

Just think of this – by increasing our turn next year one time we would be able to operate on approximately $4,000,000 less in inventory which would mean a savings of $320,000 in interest alone to our Company at 8%. If we reach our 6.2 goal in 1973, we’ll be saving approximately $800,000 in interest charges for that year. In addition, there’s the fact that profit per store is always greater when you turn your stock, keeping it clean and fresh rather than in the store and operating heavy in inventory.

So let’s go with it. Let’s see if our Distribution Center, our forty-four stores, our Executive branch, in other words – if together we can come up with the program that will get that “5.2 in 1972”. Thanks for your cooperation and help. You and I know we can do it.

Sam Walton

President

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