Wal-Mart Brings Back 8,500 Products in Bid to End U.S. Slump
Wal-Mart Stores Inc. (WMT), the world’s largest retailer, is restoring 8,500 products to store shelves to help reverse a sales slump in the U.S.
Stores will add 11 percent more products on average, with “It’s Back” flags on the items, the Bentonville, Arkansas- based company said today. New pasta, beverages and snacks have already arrived, and fresh groceries, electronics, sporting goods and apparel also will reach shelves this year.
Wal-Mart is kicking off a new ad campaign and renewing its focus on pledges to match local rivals’ prices, part of Chief Executive Officer Mike Duke’s bid to stem seven quarters of sales declines at U.S. stores open at least a year. Duke also is opening smaller Express stores to recapture market share lost to dollar-store chains.
“Wal-Mart is making progress with their remerchandising, and the launch of the ad campaign shows that most items to be returned are now back in the stores,” Colin McGranahan, an analyst at Sanford C. Bernstein, said in an e-mail. “Whether that will be enough to lure disenchanted customers back remains to be seen.” The New York-based analyst rates the shares “market perform.”
Wal-Mart’s supercenters each carry about 142,000 items, according to its website. The retailer’s sales at namesake U.S. stores account for almost two-thirds of its more than $420 billion in total revenue.
At an investor conference last month, U.S. chief Bill Simon said he had seen “an improving positive trend” in sales from the previous month. The retailer predicted the movement in first-quarter fiscal 2012 comparable-store sales in the U.S. would be between a 2 percent drop and little change. Wal-Mart plans to report first-quarter results in May.
The retailer also said it’s increasing price checks against rivals, working with suppliers to cut costs and simplifying the ad-matching guarantee. The company’s “reputation was founded on the principle of providing low prices day-in and day-out on the broadest assortment of merchandise,” Wal-Mart Chief Merchandising Officer Duncan Mac Naughton said in the statement.
Duke promoted Mac Naughton to his new post in January, the latest move in a senior management overhaul that’s taken place over the past twelve months. His predecessor, John Fleming, had removed thousands of items from stores in 2009 in an attempt to reduce clutter and focus on faster-growing product categories.
Wal-Mart fell 8 cents to $52.46 at 9:42 a.m. in New York Stock Exchange composite trading. The shares had fallen 2.6 percent this year before today.
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