Tags: Wal-Marts US CEO Sees Business Trends Improving

Wal-Mart's US CEO Sees Business Trends Improving

Thursday, 10 Mar 2011 03:29 PM

Wal-Mart Stores Inc. saw business improve at U.S. stores over the last four weeks, but it is too soon to change the company's forecasts, the head of its U.S. business said Thursday.

"We like where we're going," Bill Simon, president and chief executive of the company's U.S. stores, said at a Bank of America Merrill Lynch conference. His comments were also broadcast over the Internet.

While shoppers are still tying their purchases close to the paycheck cycle, the environment feels "more encouraging" with "little bursts of energy," Simon said.

Shares of Wal-Mart were up 0.5 percent to $52.90 in afternoon trading after rising as much as 2.3 percent earlier.

The company's U.S. sales were hurt in part by a plan enacted about two years ago, since reversed, to cut the number of items Wal-Mart offers. Under Simon, who became president and CEO of the U.S. business last June, Wal-Mart is bringing back its so-called "Action Alley" displays, which showcase goods in store aisles, and is expanding areas such as fishing supplies.

Wal-Mart is also remodeling about 450 U.S. stores this year, starting to build smaller Walmart Express stores, and looking at other ways to make itself more relevant to shoppers who have a variety of options, from dollar stores to the Internet.

One strategy unveiled Thursday is expanding a program that lets shoppers pick out items online and pick them up at one of the company's nearly 3,600 U.S. stores.

The company may also look at selling appliances, Simon said, following a report from a Raymond James analyst that suggested Wal-Mart would soon test such sales. Simon did not confirm any test during his presentation.

"We'll sell whatever the customer wants as long as we can make money on it, and we're looking at everything, including appliances, right now," he said.

He also said that once Wal-Mart is happy with the smaller store formats it is working on, it could use acquisitions to expand those stores.

"You could either acquire somebody or you could acquire sites relatively easily in a place that might not even be a retailer," he said.

The company plans to open 30 to 40 small and medium-sized stores this year, but its main driver is still the supercenters, Simon said.

ACTION ALLEY BOOST

Last month, Wal-Mart said sales at its U.S. discount chain should improve as the year progresses. For the current quarter, it expected sales at stores open at least a year, or same-store sales, at its U.S. discount stores to be down 2 percent to flat, following seven consecutive quarterly declines.

Same-store sales are getting a 0.1 to 0.2 percentage point lift from Action Alley in U.S. stores where it has been brought back, Simon said. The displays are now in about two-thirds of the U.S. stores and are slated to return to all of them.

Wal-Mart is also changing the name of its Neighborhood Market stores, which are smaller and carry a limited assortment, to Walmart Market.

Wal-Mart is by far the biggest U.S. retailer, with more than 10 percent of total U.S. retail sales, though it is not growing as quickly as the overall market.

More than 62 percent of Wal-Mart's $418.95 billion in fiscal 2011 sales came from its U.S. discount stores.

© 2017 Thomson/Reuters. All rights reserved.

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Wal-Mart Stores Inc. saw business improve at U.S. stores over the last four weeks, but it is too soon to change the company's forecasts, the head of its U.S. business said Thursday. We like where we're going, Bill Simon, president and chief executive of the company's...
Wal-Marts US CEO Sees Business Trends Improving
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