Dow Jones Newswires
By Karen Talley
For Wal-Mart, the nation's largest retailer, getting its U.S. sales back into positive territory is a crucial undertaking.
In terms of growth for the company, turning domestic comparable sales around are key, Chief Executive Mike Duke said Tuesday at an industry conference.
Wal-Mart U.S. chief "Bill Simon and the Wal-Mart U.S. team all clearly have that as a critical priority," Duke said.
While Duke said he didn't know when Wal-Mart would break what is so far seven straight quarters of falling same-store sales, he did say "traction" is being seen.
The company's re-emphasis on having the lowest prices and growing its merchandise assortment after curtailing offerings in some categories are helping to make a difference, Duke said.
The company has the majority of its planned food offerings in place and its general merchandise assortment is expected to be almost complete by the third quarter. "And that's well on its way to having the right assortment for our customers," Duke said.
Wal-Mart, which gets the lion's share of its almost $420 billion in annual sales from U.S. stores, also wants to be known as a place to get new and innovative products from its suppliers, another potential draw, Duke said.
At the same time, Duke noted that Wal-Mart's U.S. operations remain challenged, by competition, a loss of customers, inflation and higher energy prices. "When you lose a customer's shopping trip or you lose some spending of the customers, it takes time to get it back," Duke said. Wal-Mart lost customers when a bid to make stores less cluttered backfired and customers were turned off by a lack of familiar merchandise.
The retailer is also striving for innovative e-commerce services, domestically and internationally. Wal-Mart has started up a service, now in its testing phase, that allows the ordering and delivery of groceries over the Web. Wal-Mart also last week bought social media start-up Kosmix to create a new unit that hopes to tap into the emerging use of online social media to sell products. "Wal-Mart will be a leader in this area," Duke said.
Outside the U.S., Wal-Mart is in 14 countries, according to the company's website. China probably offers the most opportunity for international growth, Duke said. But he also said Wal-Mart's global presence stands to grow strongly elsewhere. He sees the company soon completing the governmental approval process for 51% of South African retailer Massmart and moving ahead with that transaction, and he is optimistic about the opening of foreign direct investment in India.
"Our international business continues to be the real growth engine of our company," Duke said.
