LITTLE ROCK — Wal-Mart Stores Inc. executives are committed to growing the company at home as well as abroad and will deploy smaller-format stores as it expands in big cities where it has little presence, executives told retail analysts Wednesday.
Supercenters, which have driven much of the company’s sales as it grew to be world’s largest retailer, still figure prominently in Wal-Mart’s future. But the company’s U.S. operations in the future will include a medium format of 30,000 to 60,000 square feet as well as a small format of less than 30,000 squarefeet for big cities and small towns.
The company’s Neighborhood Market grocery format will account for most of the medium-size stores, said Bill Simon, president and chief executive officer of Wal-Mart’s U.S. operations.
Wal-Mart’s international operations include multiplesmall formats in Mexico, South America and Britain.
Company executives met with analysts in Rogers for Wal-Mart’s annual investor conference. The event was carried live on the Internet.
Wal-Mart lowered the top end of its forecast for capital spending by $1 billion for the current fiscal year, nowprojected to be $13 billion to $14 billion. Next year’s capital spending is forecast at $13.5 billion to $14.5 billion.
Charles Holley, executive vice president, finance and treasurer, said Wal-Mart will meet its forecast of growing the company’s sales by 4 percent to 6 percent. But headded, “None of us are satisfied with our U.S. comp store sales.”
Comparable store sales, also known as same-store sales, are for stores open at least a year. Wal-Mart’s same-store sales have declined for five consecutive quarters.
To counter that trend, Wal-Mart is bringing back many products that were previously pulled from store shelves after finding that the company was losing entire shopping trips because of the reductions.
Eduardo Castro-Wright, the former chief of U.S. operations who now heads global e-commerce, said Wal-Mart is well-positioned for online sales growth, with operations in 80 percent of the markets where online sales will occur in the next five years, based on projections.
Plans for Sam’s Club, the company’s members-only, wholesale-club division, are for $1 billion in capital spending next year, much of it for remodeling 60 to 70 clubs and the rest for seven to 12 new, expanded or relocated clubs.
Mike Duke, president and chief executive officer, said Wal-Mart is more committedthan ever to reaching its core customers, which he said are under a lot of economic pressure. Even for those who have not lost jobs during the recession, he said, “there is a fear element that is still there.”
Leslie Dach, executive vice president, corporate affairs and government relations, said the company’s environmental initiatives and efforts to reduce the cost of prescription drugs have improved its reputation over the past several years.
Dach said that, among conservatives, Wal-Mart is viewed favorably, and it has improved its perception among moderates and liberals.
“That pretty much covers the political spectrum,” he said. “We don’t have to worry very much about thiselection. We’re in a brighter space for our reputation.”
Wal-Mart’s stock closed Wednesday at $53.82 a share, down 10 cents or 0.19 percent, on the New York Stock Exchange. It has traded between $47.77 and $56.27 in the past year.
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Business, Pages 21 on 10/14/2010