The Journal. - Walmart's Former CEO on the Company's Turnaround

Episode Date: February 10, 2026

Doug McMillon was Walmart's CEO for more than ten years, overseeing the company's return to retail success. WSJ's Sarah Nassauer sat down with him to talk about Walmart's turnaround, its future and a CEO's role in politics. Ryan Knutson hosts. Further Listening: - The Battle to Be the King of Retail: Walmart vs. Amazon - The 20000 Steps to a Walmart Manager's Six-Figure Salary Learn more about your ad choices. Visit megaphone.fm/adchoices

More than a decade ago, Walmart brought on a new CEO. His name was Doug McMillan, and he had his work cut out for him. At the time, Walmart's reputation was in the gutter. Online shopping and Amazon were on the rise, and other retailers like Costco and discount grocers were stealing market share. Walmart's future wasn't totally clear. Fast forward to today, and Walmart is doing much better. And McMillan set the company on a course to hit a trillion-dollar market cap,

which it did just a few days ago. Last month, after 12 years as CEO, and more than three decades at the company, Doug McMillan retired. Our colleague Sarah Nassauer interviewed him before his last day. 35 years, how do you feel? Emotional, excited. You know, first and foremost, I think companies in great hands. I don't know what I'm going to do next other than help with Walmart for a while, but we'll figure that out.

Sarah, you spoke to Doug about his tenure at Walmart. What stood out to you about the conversation? I mean, for me, I've covered Walmart for 10 years, and I felt like he was a little bit more relaxed than he's ever been when I'm talking to him. I guess, you know, we've known each other for a while, but also he probably is on his way out the door in a little bit of a different headspace than he has been the last 12 years. So what would you say, like, what defined his tenure?

I mean, I think now, looking back, what defined his tenure is that he, you know, he did it. Walmart did not succumb to Amazon, you know, in some quick succession of blows, as a lot of people thought a decade ago might happen. Walmart's a lot stronger than when he started. Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudsen. It's Tuesday, February 10th.

Coming up on the show, how Doug McMillan turned Walmart around and what challenges his successor might face. Our colleague Sarah has been covering Walmart almost as long as McMillan has been CEO. She started on the beat in 2015, And she sat down with him for an exit interview at the company's shiny new headquarters in Bentonville, Arkansas.

So, all right, I guess we're rolling. We're good. So I guess to start, will you introduce yourself and tell us how long you've worked at Walmart? Forever. My name is Doug McMillan. I'm a Walmart-so-Shit, and I've been around for a long time.

I just got my 35-year service award for 35 years of continuous service a few weeks ago. Okay. And when did you start at Walmart? Very first time was the summer of 1984 working in a warehouse here in Bentonville. Why did you apply for that job in the first place? My dad told me to make some money to pay my way through school. He was a dentist.

He moved us here to open a practice, and he said, you're going to pay your own way through school, so in addition to mowing yards, you better get a job. McDonald's, Kraft, Walmart, were the three employers of young people here in Bentonville at the time. The Kraft cheese plant didn't call me back. McDonald's paid $335, and Walmart paid $6.50. I was very excited to get a job at Walmart. And this was the summer before you started college? I was still in high school between my junior and senior year of high school.

All right, so he started at Walmart in high school and then worked his way all the way up to becoming CEO in 2014. What was Walmart's reputation like at the time? And what were the challenges that he faced when he stepped into that role? Walmart had a horrible reputation. You know, it had a reputation as being a poor employer, the union's worker unions, retirement. They were protesting on Black Friday in stores. They were going to Alice Walton, one of the daughters of the founders' apartment in New York City and standing outside. And it also had a reputation as a seller of cheap stuff.

And so he had to, like, get the basics of the business heading in a better direction. It started with how do we get the super centers growing again and cause them to be healthy. And you know Walmart well enough to know where to go to get those answers. You just go ask the associates. So that's what we did. I traveled around the country and asked our associates what needs to happen. And they said, you need to raise our wages. You need to give us some schedule certainty.

You need to get the inventory out of the back room and get back to everyday low price. We need some department managers back. We need to lower our prices. And so the team and I brought that plan back to our board in 2014 and said, this will work. For him and executives at the time, the idea was we have to make our stores, like the thing that we have and we make most of our money and profit on, U.S. stores, super centers. We have to make them better. So our workers have to be happier. They have to stick around a little longer. We have to actually invest in the stores. And if we can get like the store operating better, then we can do

this online stuff. So he and the company's board decided to invest in worker pay. And there was an announcement just before I started on the beat about, you know, they were going to go up to a minimum of $9 an hour, right, back in 2015. And eventually they would get up to 14, which is where they are today. But early on, one big investor wasn't sold on the vision. Here's Sarah in her interview with Doug again. I remember back in 2016, Warren Buffett started to sell his Walmart stock, and I think got out of Walmart by 2018, around there, and got a lot of attention at the time, right? And at the time, you know, Walmart sales were a little less even,

and you were just at the beginning of all of these strategy changes. Have you talked to him since recently? Have you gloated to him a little bit? No, no, I would not do that. That's a funny question, though. I like him a lot and have been blessed to spend some time with him. He made time for me to have breakfast with him occasionally, and I love that. So when he started selling, it hurt my feelings.

But I didn't say anything. We just went about our business, and I had confidence that our plan would work. But I finally called him. And I said, Warren, I just have to know. Is it me? Like, what is this statement? And he basically said, retail is changing so much, and e-commerce is the future. And I just don't know what to make of brick-and-mortar retail anymore.

And the answer that was right along those lines. And I said, well, I respect that. There is a lot of change going on. But we're going to be one of the winners. And I hope to see you soon. And that was the end of that conversation. I've seen him a few times since then, but I would never bring that up. But I wish he'd stayed in because he would have done well.

That's because McMillan's strategy was working. And once the stores were doing better, McMillan started focusing on online shopping. And one way he did that was by spending billions of dollars buying two e-commerce startups, one called Flipkart and the other called Jet.com. That was 2016, the Jet.com acquisition. It was $3.3 billion that they spent.

And they put the founder of that company, Mark Lurie, at the head of their U.S. e-commerce operations and brought in a bunch of folks who were JET employees as executives to run their e-commerce operations. While JET itself did not survive in any way, and I think there's a lot of debate about whether or not it made sense to make that acquisition, it's clear that it changed the culture internally. It made it clear that this was a priority.

And you did start to see their e-commerce sales grow pretty quickly. And that also sort of like changed the narrative, right, around like, well, maybe Walmart can grow online. Maybe they are going to actually try to figure this thing out. So that was another important inflection

point. One way Walmart built up its online sales was through groceries. It's the country's largest grocer. One of the key ways that Walmart grew so fast over the last 10 years is by figuring out how to sell groceries online. Like you can order

online and you can pick them up in the parking lot or have them delivered to your home and you pay the Walmart store price for those groceries and that has been a massive success. Right. So Walmart has had some wins. But what's the outlook for Walmart now that McMillan is leaving? You know, in some ways, it's a very, very, very different place. The company has grown online. It's still much smaller than Amazon online, right? But it's grown and it's grown strongly from a massive base. It's gotten more high-income shoppers to shop there more often, which is a big transition. It's never really pulled off in the past.

And how are employees today feeling about their wages and their jobs? If you look at reputational data and the firms that track that stuff, their reputation is a little bit better, right? It's not like everyone thinks Walmart is a great employer, or everyone thinks they pay enough. They get a lot of flack for having, a large percentage, a number of workers that are in government subsidies like SNAP, right? They're also the country's largest employer, so they're going to have a lot of employees in general.

But they have moved the needle a lot more than they had before, right, on how people feel about them. They do say that their turnover, like their worker turnover, is down from where it was 10 years ago. So they feel that they're, you know, getting employees to stick around longer, see them as a better place to work, and that more shoppers feel like it's a place that's for them. And Walmart recently hit a trillion-dollar market cap. How significant is that? You know, it's symbolic, right?

It shows that they have figured out how to get investors to buy into what they're capable of, and that its sales are strong and have been, been strong for a while. And now we're in a cycle where Walmart's known for low prices and people are looking for low prices. And so I think investors currently are keyed into which retailers are benefiting from some of that and navigating that well. After the break, what McMillan thinks the CEO's role should be in politics and the future of Walmart. One of the things I've found interesting covering you for a long time is you have

been CEO of Walmart at a time when we've seen demographically, a long-term trend continued towards the loss of the middle class in the U.S. How did you think about that when you were CEO? We've got to keep prices as low as we possibly can, but also continuing to invest in wages. You've seen the company do things like pay for college education in books now. You know, Walmart is investing a lot of money to try and help people move forward and to create meritocracy and to create opportunity for people, paying the truck drivers more, making sure store managers are really well compensated, but also making sure that hourlys have a cash bonus.

And we've also, on more than one occasion, as a company, called for an increase in the minimum wage. You know, Lee Scott did that when he was CEO. I've done that in this job. The federal minimum wage. Yes. Wages should go up, and we want our wages to go up. And I don't know why we can't create a higher floor on the minimum wage

and then index it so that it moves over time and we don't end up in this situation that we're in. we need a healthy middle class in this country. What do you make of the fact that he, that Doug McBellon in your interview, called for a higher federal minimum wage? Walmart has supported a higher federal minimum wage for a long time. That's not new. And there are a variety of reasons.

We have to remember the federal minimum wage is $7.25. It's much lower than almost anyone pays, right? Especially, you know, like a large national public company. And so in some ways it's irrelevant for a Walmart to say that, right? They already start at 14. I also think that Walmart understands that it benefits when more consumers feel like they can spend, right? There's a benefit to a strong U.S. economy to Walmart.

That's part of how they make money. And a lot of people who make minimum wage, of course, shop at Walmart. So if you raise the minimum wage, they'll have more money to spend at Walmart. Yeah, yeah. There's a reason that Walmart and other retailers reported such strong sales when we were getting stimulus checks during the pandemic. You know, that all flowed right to Walmart and others' bottom line. Speaking of politics, you asked him about a CEO's role in speaking out on political or social issues.

How vocal was McMillan during his tenure on politics? in the like constellation of CEOs speaking out I would place him at like medium to high medium in terms of speaking out you saw McMillan join in to speak out to support gay rights the company made changes about how it sold guns after mass shootings but you saw him speak out

you know when there were other moments of national stress over like race relations or discrimination, certainly after George Floyd was murdered, he was one of the CEOs speaking out. He, like others, has not spoken out about anything during Trump's second term. There's been some light commentary from the company about tariffs and prices will need to go higher for consumers, and they don't want that, that kind of thing.

But he and the company have quieted down quite a bit on those types of topics. I don't get up every day thinking about politics. I get up every day thinking about how we serve customers better and thinking about our associates. They're people, though, and these issues matter to them. And so what happened over a period of years is that there were things that occurred where our own associates were like, we want to hear something from you on this subject. And a number of things happened in a series that led businesses to commenting more often. And like some things, they can be taken too far.

And we don't have to comment on everything. We shouldn't comment on everything. We should live in a way that's consistent with our values. In my case, I should be doing everything I can from a practical point of view to make people that work at Walmart feel heard and included. They've got to be happy or customers won't be happy. That is the primary focus. And I'm sure in the future, John Ferner, who's replacing me and other CEOs, will end up

speaking up on some things, and they will consider what are my stakeholders think? Do I have an ability to make a difference? How does this relate to my brand and my business? and at times I'm sure people will speak up. But there's a lot of judgment required because there's no formula that tells you when you should and when you shouldn't. Walmart's next CEO is John Ferner,

another longtime employee of the company. Like McMillan, Ferner started as an hourly store employee and worked his way up. John and I've been working together for almost 20 years. He's been with a company for more than 30 years. His dad worked for the company. He met his wife at the company. Sam Walton rubbed his head one day at a camp out.

I mean, this is a situation where you've got someone who's eight years younger than I am that deeply loves the company, has done all the jobs, merchandising, operations, sourcing, all three segments, lived around the world. He really knows the business, and he's got a futuristic view of what the company can become, including how to apply AI. Why are you living now? I think the answer I just gave you is the reason why. It's because he's ready to do this better than I can. We would be sitting in meetings with some of the hyperscalers or other people talking about AI, and John really gets it at a high level and is ahead of me in some of these conversations. And when you combine that with his experience and how much he loves the company,

you get another decade or decade plus of someone who actually met Sam Walton and can keep this thing going. And the job of a CEO is leave before you need to leave, not after. So, you know, once you're running laps and it's time to hand the baton, hand it over and cheerlead. Sarah, what did you think of that answer? Why do you think he's retiring? It's a really good question. I mean, you know, he's been CEO for 12 years. It was going to happen at some point.

I believe that he could have stayed down longer if that's what he really felt strongly about. I think that they also, you know, the executives and the board decided that John Ferner, was the heir apparent and coalesced around that and then had to decide, you know, how long will he wait for to be given that role? And this is clearly when they thought they should make that transition. So they're excited about Ferner's AI experience, but Walmart is a retailer, not a tech company. So what are their plans for AI? Yeah. So I think, you know, they have said they aren't going to like create an LLM. Like they're not going to. Like, they're not going to going to create chat gpte they're not going to create a system that lets people interact with

AI in that way but they want to well they've signed two deals one with open AI with chat GPT and Google to be part of shopping on their AI platforms and so they see it as a way for people to shop so that's one thing they're experimenting with something called sparky which is like a little chat AI chat bot in their app that is supposed to enable shopping. I would consider that pretty nascent though and who knows what that will become down the road. What would you say are the biggest challenges

that the new CEO is going to face? I think part of his challenges is that his predecessor is seen as having done a really good job and that, you know, it's hard to come into a company that's not doing well, of course, and when it's a turnaround. It's also kind of hard to come into a company that's doing really well

under the guy who preceded you. Yeah, big shoes to fill. Big shoes to fill and, you know, it makes it a little, it's a different kind of challenge to figure out like, well, what is my narrative, you know, as a leader? How am I going to lead? And how will I differentiate and also be the same

but not too much the same? So I think I am interested as a reporter that covers the company to see how that plays out. I think, though, you know, we're talking about Walmart you know, kind of made it, right? Like, they didn't succumb to Amazon and the last 10 years have been really successful.

But the fact of the matter is, Amazon is also growing really fast still. And they'll probably become a bigger company by annual revenue than Walmart in the next year or two. And they're still much more powerful online. And AI is going to be, you know, influence every field and worker. And so in some ways,

You could actually say that Walmart faces basically the same challenge that it did 10 years ago. It has to keep fending off this other behemoth. So what else are you doing today? I don't know. This is like wild. I'm like, what's going on in your head? Are you okay? Like, how's it going?

I have not had an ugly cry yet. I'm trying to avoid that. Yeah. Yeah. It's really hard. That's all for today. Wednesday, February 11th. The Journal is a co-production of Spotify and the Wall Street Journal.

Special thanks to Jacqueline Scurry. Thanks for listening. See you tomorrow.