Fin24

Walmart to reassure investors on growth

2011-06-03 14:32

Fayetteville - Walmart Stores is ready to reassure employees and investors on Friday that the company can reach out to shoppers online, on their phones and in small and large stores to drive growth.

Looking for sales in all the places consumers shop, including international markets like Africa, is important as the world’s largest retailer has suffered two years of declining sales at existing US stores.

Even executives acknowledge that fixing the business is taking too long. Walmart US CEO Bill Simon spoke to reporters on Thursday about his “impatience with the pace of change” at his stores, which have lost bargain-seeking customers to dollar stores.

While business at the smaller international and Sam’s Club units has largely hummed along, all eyes are on what Walmart CEO Mike Duke and his team are doing to stem the tide at the US discount chain started nearly 50 years ago.

“We recognise we still have work to do, and comp sales growth remains the greatest priority for me and the entire Walmart US team,” Duke said in a recorded call when the company reported first-quarter earnings.

Walmart’s annual meeting is attended by investors and Wall Street analysts but is largely a staged showcase to energise the company’s employees, known as associates.

Walmart shares are up 6.3% since the 2010 annual meeting, well below the 23.3% increase in the Standard & Poor’s 500 index over the same period.

Associates come from across the United States, Canada, China and several other countries to attend the meeting. They pack hotels and even stay in dormitories at the University of Arkansas.

Chinese associates lined up at the company’s home office nearby Bentonville this week just to take a picture with a wall mural that shows “Mr Sam,” the company’s founder Sam Walton.

Also joining the fray this year are some Massmart Holdings [JSE:MSM] employees, now that Walmart’s purchase of a majority stake in the South African chain has been approved.

Still, the big question on most minds is whether US strategies, including bringing back more merchandise and opening smaller Walmart Express stores, will work.

While Walmart Express has received a lot of attention, that format - modelled after several smaller stores operated outside the United States - is not expected to be the major growth engine for Walmart.

Supercentres are still crucial. More than 100 are set to open this year, while just 15 to 20 Walmart Express stores will make their debut in northwest Arkansas, North Carolina and Chicago.

The first Walmart Express, opening in Gentry, Arkansas, this weekend, stocks everything from milk to pillows in a 15 000 square foot space.