Wal-Mart Stores Inc. reported its seventh consecutive quarterly sales decline for the U.S. as the company lost consumers to dollar stores, though food continued to generate positive results for the worldâs biggest retailer.
Comparable U.S. store sales fell 1.8%, excluding gasoline, during the 13 weeks ended Jan. 28 compared with the same period a year earlier, according to a Feb. 22 Wal-Mart statement. The sales figure excludes Wal-Martâs Samâs Club stores.
In the statement, Mike Duke, Wal-Martâs chief executive, said he was disappointed with the quarterâs sales, which fell short of a forecast the company released in November. Back then, Wal-Mart said it expected comparable-store sales for the quarter to range from a 1% decline to a 2% increase.
It will take some time to see positive comparable store sales, Duke said, according to the statement.
âSome of the pricing and merchandising issues in Wal-Mart ran deeper than we initially expected, and they require a response that will take time to see results,â Duke said. âThere is no greater priorityâ than getting sales back into positive territory, he said.
Wal-Mart fared better in food, with U.S. sales posting âlow single-digitâ gains during the quarter, Bill Simon, chief executive of the retailerâs U.S. operations, said during a pre-recorded conference call.
âWe believe the additional assortment we put into grocery increased our relevancy for customers,â Simon said, according to a transcript of the call.
Bentonville, Ark.-based Wal-Mart expanded fresh food departments in recent years, with aggressive discounts that drew customers away from traditional supermarket chains. In October, Wal-Mart said it planned to double its sales of locally grown fresh fruits and vegetables in the U.S. over the next five years as part of a broader effort to support sustainable agriculture worldwide.
Wal-Mart accounts for about a fifth of the U.S. retail food market and sold about $132 billion in groceries in the companyâs fiscal 2010.
Despite sagging overall sales, Wal-Mart likely will continue its food expansion, though the retailer will have to keep prices low because of increased competition from Target and others, said Natalie Berg, Global Research Director for Planet Retail in London.
âIn the U.S., thereâs a number of alternative retailers looking to capitalize on fresh food,â Berg said. âPricing is going to be more competitive.â
Keeping food prices low will be particularly important as Wal-Mart expands into large cities such as Chicago and Washington, D.C., Berg said.
Duke said Wal-Mart will continue to add Supercenters and will move forward âwith even greater urgencyâ in opening small stores.
âIâm encouraged by the response weâre seeing in urban markets like Chicago, Washington, D.C., San Diego and New York,â Duke said, according to the transcript.
Wal-Martâs quarterly profit still rose 27%, helped by strong international sales.
During the three months ended Jan. 31, Wal-Martâs fiscal 2011 fourth quarter, net income rose to $6.06 billion from $4.76 billion a year earlier. Total revenue rose 2.5% to $116.4 billion.