Addressing the 2008 World Retail Congress in Barcelona, veteran US retailer Jack Shewmaker has issued a sharp warning to companies that fail to re-invest regularly in their core business.
“Take money out of the growth aspect [of your business] to make sure the core business is strong. Take your CAPEX budget apart to make sure you’re rejuvenating the business as you go.”
The former vice chairman and chief financial officer of Wal-Mart, said the retail industry is facing some big challenges, stressing the dangers of underestimating the competition – in particular their new initiatives and concepts – as well as the importance of being fully aware of global trends.
“In the global economy it’s not enough to be a dominant retailer in one country. You may not want to expand globally but you sure want to be studying what’s happening globally,” he said.
Even in today’s uncertain economic climate, Shewmaker said that adversity and good management make a company stronger, adding that during the economic downturns of 1974-75 and 1980-81, Wal-Mart’s market share and profits grew more rapidly than in other years.