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.