We may never know exactly why Ron McCormick left or was pushed out of his produce job at Wal-Mart.

Questions remain after Wal-Mart personnel shakeout
Andy Nelson
Markets Editor

Just as we may never know the circumstances surrounding the departure of Bruce Peterson, the company’s former general merchandise manager of perishables, who stepped down in 2007.

McCormick, Wal-Mart’s former vice president and divisional merchandise manager for produce and floral, announced his new role at the company in an April 29 letter to suppliers. McCormick will spearhead the creation of a division focused on locally grown and sustainability initiatives.

According to one retail analyst, McCormick may be succeeded by an executive from Asda Group PLC, an upscale British retail chain owned by Wal-Mart.

The source also said he learned that McCormick was part of a huge shakeup at the company, in which executives essentially had to “re-interview” for the jobs they already held, to see if they were still a good fit.

Officially, McCormick’s role “has evolved so that we can leverage his expertise more fully within the Wal-Mart organization,” according to Caren Epstein, the company’s director of public relations and brand reputation.

Things typically evolve to a better state, which would suggest a promotion, right? But the use of the kind of P.R. gobbledy-gook that makes you scratch your head suggests it’s probably not.

More likely, according to some Wal-Mart suppliers and industry retail analysts, McCormick had one idea of where to take the division, the company had another, and guess who won?

It was likely, these sources say, a case of the bean counters versus the folks who like to make sure the bean (and fruit and vegetable) growers get a fair shake. 

“When you purge yourself of guys like Ron and Bruce, who are passionate about produce, (you run the risk of) bringing in people who treat it like canned goods and toilet seats,” one industry analyst said.

A Wal-Mart fruit supplier said it was that mentality — treating produce like hard goods — that helped drive Peterson, widely credited with building the company’s produce program from the ground up, away from Wal-Mart.

“And my suspicion is that is still a problem for people in produce (at Wal-Mart),” the source said. “I’m betting the people they have in their leadership are struggling, just as Bruce did when he left.”

Peterson could not be reached for comment.

Wal-Mart’s “rollback” philosophy of price reduction may work if you can find a Chinese company to supply CD players cheaper than an American company, the source said. The same principle doesn’t apply in fresh produce, he said.

Meanwhile, the retail analyst said that Wal-Mart is likely transitioning from a management structure in which all employees reported to McCormick, who in turn reported to senior vice president and general merchandise manager for perishables Pam Kohn.

Kohn, who has herself been reassigned — to Wal-Mart’s global procurement division — has been succeeded by DeDe Priest, a current Wal-Mart and former Safeway executive, according to sources.

In the new management structure, employees will report to one of four division heads, the analyst said. One manager will be in charge of finances, one merchandising, one replenishment and one buying.

The replenishment manager could have his work cut out for him, the analyst said. For a company that is supposed to have one of the most sophisticated inventory control systems in the world, Wal-Mart does a lousy job with groceries, he said.

Center-store out-of-stocks can sometimes run up to six times greater than a conventional grocer in the same market, he said.

And produce is no better.

“I go in there on Sundays — the busiest day of the week — and they’re out of bananas,” he said.

One way forward for Wal-Mart could be the new line of small-format stores it created to compete with Tesco’s Fresh & Easy stores, said another retail analyst.

He recently checked out four of the new stores — about half the size of Wal-Mart’s Neighborhood Market stores — in the Phoenix area.

“The perishable departments were much stronger than I expected,” he said. “The produce presentation was very well done, well-managed.”

“Save Money, Live Better” came as a welcome slogan change from the old “Always Low Prices.” Let’s hope that whatever changes come to Wal-Mart’s produce division, its suppliers will be able to live, if not better, at least not any worse.