Todd Harbaugh Operations Mexico

My career in the company

Field leadership

VP Merchandising

Samsclub.com

Roadshows

Wholesale Trading/Exports

Demos

Call Center

SVP Replenishment

Inventory Management

Replenishment

Logistics/Distribution

Systems

Planning

Pricing

Packaging

SVP Planning & Integration

Chief Integration Officer

Integration & Planning

Internal Communications

Meetings & Events

SVP Sam’s Club

Operations

Merchandising

Replenishment

Planning & Integration

Membership & MKT

Finance

EVP Operations

Operations & Membership

U.S. & Puerto Rico

Integration & Planning

Internal Communications

Meetings & Events

Store manager

Assistant manager

District manager RPV

% Comp Growth 2015 vs 2014

Positive 2 year stack in Self-service & Sam’s

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

2016 vs 2015

14.8 16.0

18.1 17.4

Jan Feb

6.6 6.2 7.3

8.5

5.8 6.8

4.1 3.9

Comp Growth % Food & Consumables General Merchandise Apparel & Shoes

SS SC

% Comp growth 2015

Consistently growing by division

Winning market share

North

Southwest

Metro

Northeast

Southeast

Center

Northwest SS SC

Region Comparison vs ANTAD 2015

North

South Center

Metro

(bps)

4.3

11.3

6.6 6.1 7.3 7.2

5.8

1.4

Department Stores

% Comp Growth 2015

Self Service & Clubs

Self-Service Mexico

Antad (Excluding Walmex)

Exceeding vs ANTAD but opportunity vs department stores

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 2015

Highest growth and

base in the history of Sam's Club

Sustained member base growth in Sam’s Club

And improving traffic throughout the year

-0.5

0.6 1.2 2.5

4.5 4.3 5.2

3.4 2.7

5.3

1 Q 2 Q 3 Q 4 Q YTD 2016

SS SC

Our mission

Innovate & optimize

for sustained growth

Become the most

valued omni- channel retailer

in Mexico

2016 2017 2018

Physical – digital

integration

Omni- channel

Build the store of

the future

2019 - 2024

Save people money so they can live better

Initiatives: leveraging the productivity loop

• Operate with excellence

• Transformational productivity

• Mkt optimization

• Differentiation across formats

• Regionalization & segmentation

• MRM & CRM

• Focus in perishables

• New credit proposal

• Relationship with suppliers

• Feature plan

• Price leadership

• Omni-channel

Operate for less

Buy for less

Sell for less

Grow sales

Our way of working

Our strategy

Our strategy

1 Improve customer & member experience

2 Differentiation across formats

3

Regionalization & segmentation

4 Transformational productivity

Achieve at least 3% comp sales growth

5 Way of working

1

MRM

& CRM

Improve customer & member experience

Focus in perishables

New credit proposal

Operating with

excellence

Improve price perception

Fast Friendly Clean Secure

20142015

Improve customer & member experience 1

Fast Friendly Clean Secure

Operational focus Growth 2015 vs 2014

Improve price perception

Operating with

excellence

MRM & CRM

New credit proposal

Focus in perishables

Improve customer & member experience 1

MRM & CRM

New credit proposal

Focus in perishables

Improve price perception

Operating with

excellence

Improve customer & member experience 1

Improve price perception

Operating with

excellence

MRM & CRM

New credit proposal

TotalSelf Service

Price perception Growth 2015 vs 2014

Continue to drive Price Leadership

* In Sam’s we consider the IES result on price perception

Focus in perishables

Improve customer & member experience 1

Targeted MKT

Social media

MKT optimization

Digital strategy

Engagement plan

Relationship plan

Share of wallet plan

MRM & CRM

New credit proposal

Focus in perishables

Improve price perception

Operating with

excellence

Improve customer & member experience 1

Payments services

Bodega credit (pilot)

Private card mprove price perception

MRM & CRM

New credit proposal

Focus in perishables

Improve price perception

Operating with

excellence

2 Differentiation across formats

Clear format strategy

Alignment with

our suppliers

Differentiate merchandise

2 Differentiation across formats

Who is the customer?

• Demographics

Right assortment

• Different where it needs to be different

Pricing strategy

• vs which competitors

Clear format strategy

Alignment with

our suppliers

Differentiate merchandise

2 Differentiation across formats

Alignment with

our suppliers

Joint business plans

Supplier summit

Execute feature plan

Top to top meetings

Differentiate merchandise

Clear format strategy

2 Differentiation across formats

Focus in business member

Mom & Pop’s HORECA Offices

Veracruz La Noria

4X 2X

Differentiate merchandise

Clear format strategy

Alignment with

our suppliers

2 Differentiation across formats

Presentations

Alignment with

our suppliers

Clear format strategy

Differentiate merchandise

2 Differentiation across formats Differentiated products

in groceries, consumables & fresh

Differentiate merchandise

Quality Newness Exclusives

Price Package Quality Bulk Exclusives

Brand

Exclusives

Package Innovation

Exclusives

Price Imports

Exclusives Exclusives

Alignment with

our suppliers

Clear format strategy

2 Differentiation across formats Differentiated products in general merchandise

Differentiate merchandise

Brand Exclusives Newness Innovation

Brand

Exclusives

Newness Quality Imports

Clear format strategy

Alignment with

our suppliers

2 Differentiation across formats

Packaging

Before Now

Differentiate merchandise

Clear format strategy

Alignment with

our suppliers

3 Regionalization & segmentation

3 Regionalization & segmentation

1 2 3

Cluster

2 Socioeconomic Level

Geography / Weather 3

1 Prototype Big Medium Small

High Medium Low

3 Regionalization & segmentation

Regional insights

Regional competitive strategy

Regional merchandise

Regional mkt strategy

Store & club of the community

Nationwide

North

Transformational productivity 4

Store of the future

Cashier front end redesign

Engineering standards

Technology advancement

Logistics network redesign

We move for less (WM4L)

Way of working

Ownership Think like the owner

Walmart basic beliefs

Customer & member centric

Teamwork Ownership

Innovating & testing

5

Our strategy

Win with new stores

Store & club manager selection & training

Store & club of the community

Good neighbor

Start off strong

Our strategy

Setting the path towards a physical & digital integration

Drive omni-channel from the store

eCommerce strategy Enabling the business

Setting the path towards a physical & digital integration

Digital infrastructure

Wifi in xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Enhanced assortment vs expanded assortment

Align processes across all channels

Best service during the whole process

Drive omni-channel from the store

Kiosks in stores

New App

Deliveries: Home, business or pick up in the store

Convert spaces in store to have a digital experience

Click and pick

Commitments

Exceed 3% comp. growth

Become the best omni-channel retailer in Mexico

Exceed Customer & Member expectations everyday

Leverage expenses through transformational productivity

In the end our focus will always be…

In the end our focus will always be…