Wal-Mart Cautious as Fuel Prices Rise
Bentonville, Ark., Wal-Mart Stores CEO Lee Scott said the company is adopting a cautious stance, considering that rising fuel prices could mean this year will not be easy.
“With fuel pries going up, it feels like it’s going to be a challenging year,” he said on Tuesday during a television interview on Fox News.
“I wouldn’t say worried is the right word. But I think we’re cautious thinking through what it means. Fuel prices have an impact on our basic customer,” he added.
Wal-Mart has been struggling to revive sales at its U.S. store base, which have been hurt by lackluster shopper response to its efforts to sell trendy clothing and a disruptive store-remodeling program.
Ahold 4Q Net More Than Doubles
Netherlands, Dutch retailer Ahold NV beat market forecasts on Thursday as it more than doubled fourth-quarter net profit and said it would buy back more shares, suggesting it expects a good price for a U.S. unit. Profit rose to 240 million euros ($319 million) from 108 million euros a year ago.
Ahold said it planned to increase its share buyback to 3 billion euros from 2 billion, raising hopes it will get a higher-than-expected price for its catering-supplies unit, U.S. Foodservice, which it put up for sale last November. Asked whether the higher buyback was linked to optimism about the U.S. Foodservice sale, CFO John Rishton said: “Clearly we have more information than we had.”
He said the sale process was progressing well but declined to provide more details.
Ahold is selling U.S. Foodservice, which sources say has attracted bids from several private equity groups and could receive more than $6 billion.
IKEA Plans Midwestern DC
Conshohocken, Pa., IKEA said it plans to open an approximately 1.4 million-sq.-ft. distribution center on 72 acres at the Laraway Crossings Business Park in Joliet, Ill., south of Chicago. The new center will allow IKEA to receive goods in Joliet by rail, to manage its inventory and to distribute product to stores throughout North America, with a focus on IKEA stores in the Midwest.
The project will consist of a 650,000 sq.-ft. facility to be operational as early as spring 2009. The plans also allow for a potential expansion of approximately 770,000 more sq. ft. should the storage capacity be necessary.