Wal-Mart U.S. continues to struggle with sales - The Packer

Wal-Mart U.S. continues to struggle with sales

11/14/2013 12:31:00 PM
Coral Beach

Produce department in Wal-Mart Neighborhood MarketCourtesy Wal-MartAlthough overall comparable sales in the U.S. were down for the third quarter, fresh produce sales increased slightly for Wal-Mart. Company officials said Neighborhood Market stores such as this one are doing well, with 32 of the smaller format locations having been added in the third quarter this year.Wal-Mart Stores Inc. has posted a third straight quarter of declines in comparable sales in the U.S., blaming a drop in shopper visits and predicting lackluster profit for the upcoming holiday season.

The Bentonville, Ark.-based retailer reported its third quarter results Nov. 14 for the quarter that ended Oct. 31. In a pre-recorded conference call, corporate officials said worldwide the company logged net sales of $114.9 billion, which was up 1.6% compared with last year’s third quarter.

In the U.S., net sales increased 2.4%, reaching almost $68 billion for the quarter, said Mike Duke, president and chief executive officer. He said the chain has seen good results with its Neighborhood Market format.

“Our Neighborhood Markets produced comp sales in line with best-in-class competitors. We’re on pace to increase this small format fleet by almost 50% this year,” Duke said during the call.

Bill Simon, president and CEO of Wal-Mart U.S., said fresh produce increased comparable sales in the “mid-single digit” range for the quarter. Overall grocery business posted a decline in comparable sales of 0.7%, Simon said.

The head of the U.S. operations echoed Duke’s enthusiasm about Wal-Mart’s smaller format stores.

“We continued to accelerate our small formats, opening 32 Neighborhood Markets and an additional Express store during the quarter,” Simon said. “We saw continued strength in our fresh departments, particularly in produce and meat, along with adult beverages and key consumable categories.”

For the fourth quarter, the retailer plans to add about 3.7 million square feet by opening new stores and expanding others in the U.S.

To curb costs in foreign markets, executive vice president and chief financial officer Charles Holley said the retailer plans to close about 50 underperforming stores in Brazil and China.

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Charleston SC  |  November, 14, 2013 at 01:44 PM

Perhaps the problem isn't footage as much as price and availability. Walmart here has horrible looking, old produce and frequently I have to ask for the price as it is not listed or they are so scrunched together with odd names "golden small queen potatoes" rather than small white potatoes that no one knows which price goes on which item. And prices are far and above anything you can get at other local retailers for the same thing. We have a shortage of good, tasty FRESH produce here and most people will not buy HUGE bags of anything they can't use in two weeks. Think like a shopper and you will get more bank for our buck!

Produce Guy    
Texas  |  November, 18, 2013 at 06:55 AM

Their produce is horrible because of their buying and handling practices. They want the industry to bend to their demands instead of the other way around and this will not happen. You can not have underpaid "associates" do the job of a professional produce managers. Squeezing suppliers and arbitrarily taking percentage points for "promotions" and "marketing" out of their checks is also not good for building solid supplier relationships. Cheapest price + produce = major disaster for your bottom line. They will either accept this or learn it the hard way. Thankfully, the unpredictable nature of the produce industry will save it from being bullied into destruction like they did with the grocery business. All of us in the produce industry should all be thankful for that!

Dallas  |  November, 15, 2013 at 09:11 AM

Retailers who continue to ignore quality and service for margin will continue to struggle. Those performing at a high level have focus in the perimeter. Consumers who spend the cash won't settle for poor quality and service no matter how cheap it is.

North Dakota  |  November, 15, 2013 at 10:28 AM

As long as WalMart treats their produce departments like non-perishable departments they will struggle, especially in labor hours and training of associates. I laugh everytime I see their TV commercial comparing their produce departments to a beautiful outdoor produce market. Next time they should film the commercial in a WalMart produce aisle about 7:00 in the evening in front of empty shelves and spoiled fruit.

Phoenix  |  November, 15, 2013 at 12:46 PM

It's what happens when the board of directors and store management care more about profit than they do quality. If the CEO of wally world would go to an out-of-state store as an undercover boss, he would be shocked at what really goes on in stores outside of Bentonville. I for one LOVE the small grocery store only and I liked the Marketplace for quick stops. They closed Marketplace in Phoenix and now Fresh n Easy is gone too.

FLORIDA  |  November, 15, 2013 at 01:18 PM

Worst produce at any chain store level, they buy ok but store management ruins it. As with most product in the store, they have forgot one of the 3 P's of of marketing (price, promotion and product), PROUDCT.

Chris Sawyer    
Candler, NC  |  November, 15, 2013 at 07:06 PM

The sales aren't decreasing fast enough if you ask me...Walmart is the worst thing to happen in retail I've seen in my lifetime. throw them in a bucket with Monsanto. Hope they choke on High fructose corn syrup.

Milwaukee  |  November, 21, 2013 at 03:50 PM

It is hard to find too much fault with one of the most sucessful companies in the world. However even great companies can improve. Their produce often is poor quality and is a result mainly of poor merchandising. WalMart has pledged to address this. So far I have not noticed any major change. Small changes like tight ordering, proper rotation and culling will help. They buy excellent labels and have an efficient distribution system. Watch out competitors if they fix the merchandising.

Paul Ryan    
Stamford CT.  |  November, 21, 2013 at 06:30 PM


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