Walmart EVP Steve Bratspies Presents Walmart’s Grocery Game Plan

To say that the presentation by Walmart Food EVP Steve Bratspies to the Bentonville Bella Vista Chamber’s WalStreet supplier group last week was well timed is an understatement. Retailers’ obsession with all things edible has been in full force for a few years, but it has recently escalated into a frenzy. Even though the much-feared European discount powerhouse, Lidl, recently postponed plans to hang hundreds of shingles in the U.S. (its stateside expansion is now slated for 2018), many others are ramping up on the grocery front. Target EVP Kathy Tesija recently called food a “critical area of the store” and its reinvention of the category, including increased specialization and a focus on health and wellness, is in early stages. Target has also hinted at aligning grocery with its other categories by backing off of national brands and strengthening its private brand bench. At the same time, fearless food juggernaut Kroger is showing no signs of slowing down, even as it gobbles up bricks-based regional competitors, digital wellness players, and big data powerhouses.

If that weren’t enough, oodles of digital upstarts promising various combinations of curated culinary experiences, dietary specialization, and rapid home delivery continue to hit the scene, including Blue Apron, Instacart, Plated, and Hello Fresh. Amazon’s relentless assault shows no sign of letting up either as it rolls out Amazon Fresh to new markets and partners with bricks-based retailers to fill the gaps.

The current competitive landscape paints a daunting backdrop for Walmart, a retailer for which grocery is a make-or-break business, even as it must also manage a multitude of other categories. Mr. Bratspies began his presentation by ticking off a litany of consumer trends that only add to the pressure, then offered a robust run-down on Walmart’s plan of action on multiple fronts.


Baby boomers are consuming less as they get older, Gen X is in its prime consumption years yet it represents a relatively small group, and even Millennials, the squeaky-wheel generation that is getting the most grease from retailers, are forming households later in life. At the same time, shoppers are visiting fewer retailers; according to Bratspies, trips are going down along with the number of stores shopped. That translates to fewer trips for retailers to capitalize on, fewer conversion opportunities, and fewer interactions with customers. These and other realities are a baseline buzzkill for the grocery business. As Bratspies said, it’s “just pure math.”

Even so, as consumer preferences shift, retailers have the opportunity to cater to new choice-drivers. Bratspies identified three as having particular relevance.

1. Food as experience, not just sustenance

Ethnic food in particular has gained popularity recently, with 75% of shoppers having purchased it in the past month and growth predicted at 20%. Millennials may drive a good portion of this growth, since they have more adventurous palates.

2. Dietary needs

Nearly two-thirds of baby boomers have a chronic health condition, and one in three Americans are predicted to have diabetes by 2050. 19 percent of baby boomers see food as integral to managing their health conditions.

3. Blurring of meals and snacks

One in five eating occasions is a snack, with 53% of consumers snacking two to three times per day.

Consumers are also demanding unprecedented transparency in product sourcing and processing as well as clean labels and fewer ingredients. According to Bratspies, “there’s nowhere to hide,” and, echoing themes from Walmart COO, Judith McKenna’s February presentation to the WalStreet group, complexity of any kind is to be avoided at all costs.


Bratspies outlined five customer promises that are foundational to Walmart’s strategy in the midst of these shifts.

  • EDLP – Price is still “the decider,” even as the bar is being raised across other customer criteria.
  • Quality you can trust – Customers are smart enough to expect one-dollar quality on a one-dollar item but won’t tolerate one-dollar quality on a five-dollar item. Quality is defined by the item being purchased.
  • Everything you need – Despite its forays into small formats, Walmart is still very much in the supercenter business and is invested in facilitating a one-stop-shopping experience for its customers.
  • Happy to help – Of Walmart’s three sub-promises (a fast, clean, and friendly shopping experience), friendliness makes the biggest difference at the end of the day.
  • Shop your way – Customers must be able to access Walmart online from any device and from multiple locations.


Walmart has enjoyed a 20 percent compound annual growth rate in food over the past 20 years. Bratspies identified several calls to action that are foundational to continuing and improving upon the trend.

1. Win in fresh

Consumers are eating more fresh foods, but even if that weren’t the case, getting fresh right is the cornerstone of any fully functioning grocery business.  Fresh drives trip frequency, which, in turn should amp up sales in higher-margin categories. Bratspies cited new bakery technology and the introduction of new deli brands as steps in the right direction for Walmart, yet he stated that a “share gap opportunity” exists in fresh nonetheless. He outlined four elements that will frame Walmart’s win-in-fresh framework: assortment and presentation, customer experience, systems, and processes.

In terms of processes, Bratspies paid particular attention to sourcing, reiterating the need for supply chain transparency and simplification along with the opportunity to leverage local sourcing and respond to market-specific competitive dynamics. Just two days after his presentation, Walmart signaled that it will also enforce more stringent animal welfare standards, giving another nod to transparency and Millennial-friendly practices.

He broke the company’s mission to provide safe and sustainable food into two categories: supply and demand, with supply encompassing variations in water, land, technology, weather, and labor, and demand being driven by population growth, global demand, and alternative food use.

2. Re-energize the center of the store

The perimeter of the store may be where most grocers drive differentiation, but the center aisles still generate the lion’s share of sales. A couple of the consumer preference dynamics that opened Bratspies presentations actually fall into what he identified as “underdeveloped categories” in the center store: dietary needs and organics (premium frozen products and adult beverages were also in the mix). Organics in particular have sparked a heated competitive battle, with Walmart once again redefining the retail value proposition and transforming a niche for the well-to-do into an accessible staple with mass appeal.

Bratspies spoke of the need to manage the space in Walmart’s stores as “the precious asset that it is” and alluded to a “space capture project” that will help make it happen. Still, according to Bratspies, the progress up to this point hasn’t been good enough. For example, he candidly stated that, even though most people would assume that Walmart understands the impact that various category adjacencies have on its business, for the most part, it doesn’t. He also identified an opportunity to reduce the amount of time it takes to move items to the selling floor and to execute a “one-touch” model that would free store associates to interact with customers and ensure that store shelves are fully stocked.

3. Expand physical-to-digital integration

Walmart is testing enumerable home delivery, store pickup, and drive-through models at the moment, and, with the slew of nimble competitors catering to niche markets in the food convenience space, Walmart can’t afford not to explore new frontiers. The Denver area in particular has served as a teeming testing ground for Walmart’s clicks-to-bricks innovations, the latest being its answer to Amazon Prime’s subscription-based shopping model. Walmart’s Rocky Mountain beta-palooza may have even played a role in Safeway’s recent decision to prune stores in the Denver area and could signal the effect Walmart will have in other markets as various concepts are refined and rolled out.

To Walmart’s great credit, it was one of the first retailers to snap out of the “bricks are dead” doldrums and own its physical scale as a key differentiator. The next challenge, according to Bratspies, will be to solve the "dysfunction" between online and in-store once and for all, with the ultimate goal of unifying the Walmart experience, regardless of whether customers are shopping in-store, online, or via their mobile devices. Walmart is also paying attention to how it girds these efforts through integrated marketing, to include managing its various brand expressions on other platforms such as Facebook and Pinterest, leveraging relevant digital content, creating a compelling digital presence for key categories like food, upgrading print media, and incorporating its long-standing relationships with influential bloggers. Andy Murray, SVP of creative and marketing operations, provided in-depth insights on Walmart's creative engine in his presentation to the WalStreet group last year.

4. Win on the fundamentals

Walmart’s U.S. President and CEO (and Bratspies' boss) Greg Foran has been talking about mastering fundamentals since he assumed his role last July. According to Bratspies, this effort all starts with the people. Walmart recently put its money where its mouth is when it announced that it would raise its minimum hourly wage to $9 – more than 20 percent higher than the federal minimum. He also spoke of the need to provide a customized experience for customers rather than taking a “Turkish bazaar” approach to merchandising.


Bratspies encouraged global suppliers to bring great ideas from other markets, including concepts that may be “hung up” in corporate systems yet be of interest to Walmart. He boldly invited suppliers to tell him how big of an order he would have to write in order to grab great innovation, adding that suppliers “might be surprised” by the response.

He encouraged suppliers to empower Walmart-facing teams to make decisions rather than having to go through layers of decision-making in order to get things going. Retailers have been steadily removing layers of organizational hierarchy in order to amp up agility (or, as I like to say, “the retail world is flat”), so it stands to reason that their tolerance for Byzantine decision-making structures and good cop/bad cop games is wearing thin. Bratspies emphasized the need to “hustle” and to embrace a sense of urgency and alacrity when working with Walmart.

In perhaps his most welcome invitation, he encouraged companies to “come sell us stuff”. Scorecard reviews are one thing, according to Bratspies, but buyers are there to buy. Deeming store managers and buyers as the two most important positions at Walmart, he went on to dispel the myth that buyers know what they are looking for. He encouraged suppliers to bring a point of view and to back it up with trend analysis and other relevant data.

Bratspies repeated the mantra, “It’s not complicated, it’s just hard work,” more than once during his presentation. One could easily argue that the grocery business is both these days. However, Walmart is clearly doing the hard work to ensure that it meets its customers where they are going next.

Like this article? You'll probably enjoy Carol's takes on other WalStreet executive presentations:

Walmart's Judith McKenna on Synergy and Simplicity

Walmart's Andy Murray Gives Creative Calls to Action

Lisa CarverComment