Wal-Mart plans for 20 years of growth
Fayetteville, Ark. Wal-Mart Stores’ CEO Mike Duke told shareholders at its annual meeting Friday that the company is positioning itself for 20 years of worldwide growth and that it plans to hire a half-million employees over the next five years. The discounter also unveiled a new $15 billion stock buyback.
Wal-Mart also acknowledged the current economic volatility.
“There is business opportunity in the world, but the world is changing fast in big, disruptive, complex ways,” Duke said.
Wal-Mart has been feeling the heat of competition and slowing sales lately, as some of its better-off customers head back to Target and the mall, and more cash-strapped shoppers search out extreme-value stores such as Family Dollar for even better deals. Duke said he is “optimistic” about the business and plans to continue to widen the discounter’s price gap to stay ahead of rivals.
Duke noted that the U.S. division needs to improve same-store sales and Sam’s Club needs to continue to drive product quality and even greater membership growth. The international division will be called upon to further improve returns and accelerate growth.
Duke emphasized the role that technology will play in the company’s growth strategy. He said the chain will closely study mobile technology, including its potential in developing countries, with the aim of making it possible for consumers to buy what they want, how they want, and where they want a product.
“Building the best Web site is just as important as getting our store format right,” Duke said.
On another front, Duke said Wal-Mart will remain focused on holding the rate of increase in expenses.
In a Q&A with reporters after the meeting, vice chairman Eduardo Castro-Wright said stores in areas with high unemployment have the worst numbers while stores in low unemployment areas are thriving, the Associated Press reported.
Duke told reporters that the chain will grow by adding both large-format stores and smaller ones, both in the United States and abroad. The smaller stores will not be limited to urban markets, Duke said, but could also serve as a destination for shoppers making “fill-in” trips for basics.
The meeting was a celebrity-laden extravaganza, hosted by entertainer Jamie Foxx and featuring performances by artists from Mariah Carey to Josh Groban.
Pier 1 Q1 comps up 14.3%
FORT WORTH, Texas Pier 1 Imports reported that comparable-store sales for the first quarter ended May 29 increased 14.3%. Last year’s comparable-store sales declined 7.5% for the first quarter ended May 30, 2009. Total sales for the quarter improved to $306 million compared with $281 million in the year ago quarter.
Alex Smith, president and CEO said, “We are extremely pleased with our first quarter sales increases. Comp-store sales continue to be driven by consistent increases in conversion rate, average ticket and traffic. As previously reported, March sales benefited from the earlier Easter holiday but business was solid throughout April and May ending with a strong Memorial Day weekend. All major merchandise categories performed well during the quarter and the variations in the performance geographically were much less than last year. We look forward to discussing our first quarter results in detail during our upcoming conference call.”
Report: Consumer spending slows in Q2
PURCHASE, N.Y. According to the lates report from MasterCard Advisors’ SpendingPulse, this month, more retail sectors showed a respite in year-over-year growth, as slow economic recovery appeared to weigh on the U.S. consumer’s spending behaviors.
Michael McNamara, VP research and analysis for SpendingPulse, observes, “The momentum in consumer spending that was building through the first quarter, seems to be taking a breather in the second quarter of 2010, at least so far. Financial volatility in the capital markets and ongoing macroeconomic issues could account for this shadow cast over the recovery in consumer spending. Some sectors seem to be responding to specific disruptive events, such as the expiration of the Federal housing tax credits, where previously we’d noticed a beneficial “echo” effect on housing related categories such as Furniture and Furnishings. In addition, Memorial Day occurring a week later than it did last year, could have pushed some spending into June, 2010. Nevertheless, we continue to see strength in pricing, and in most categories, we are registering solid increases in the SpendingPulse Price Index, indicating that inventories continue to be aligned to demand, and retailers have not had to return to steep discounting.”
According to the report, May was another strong month for e-commerce, with the channel seeing sales increase 13.7% over May 2009. The best performing sub-categories of e-commerce were children’s apparel and family apparel, growing 30.4% and 26.2% respectively, on a year-over-year basis.
Electronics and appliances sales were down 0.7% from last year. Consumer electronics sales fell by 0.8%, while appliance sales were flat. SpendingPulse reported that the appliance category’s flat sales could be explained by expiration of the Federal Housing Credit at the end of April, while the lack of new product launches in the consumer electronics sector could account for any weakness in this usually strong sub-category.
In a second month of decline, total U.S. apparel decreased 3.7%, with declines in all sub-categories except children’s apparel, the report found. Steepest declines were in men’s apparel, down 10.4%, the usually strong footwear category, down 7.3%, and women’s apparel, down 6.1% . However, pricing continued to hold firm for the category as a whole, showing a healthy 5.4% increase in the overall apparel pricing index, on a year-over-year basis, SpendingPulse reported.