Wal-Mart puts the brakes on
The world's largest retailer has announced a change of course. Wal-Mart has decided to slow expansion into new markets while it works to boost its bottom line. Sam Eaton reports.
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SCOTT JAGOW: Wal-Mart shares got a boost because the company said it’s gonna take it easy on the growth next year. Sam Eaton reports.
SAM EATON: Wal-Mart opened 340 new stores last year. But it expects to open just over 300 in the coming fiscal year. Retail analyst Richard Hastings says it’s all part of a well-laid plan.
RICHARD HASTINGS: Wal-Mart is not revising its growth story in North America because there’s anything wrong with the business. It’s just they have to begin to think about a different store format, smaller size, and enter into much more complicated, densely-populated areas.
In other words, urban areas, where land is more expensive and consumers have been flocking to hipper rivals like Target.
Target’s growth in sales has outpaced Wal-Mart by a factor of five.
But Hastings says that’s all relative when you consider Wal-Mart’s scale. The retail giant still adds $200 million in additional sales to its bottom line every month.
In Los Angeles, I’m Sam Eaton for Marketplace.