FAYETTVILLE, Ark. - Wal-Mart Stores Inc., which once prided itself on rapid expansion, has scaled down plans to open new Supercenters in 2007 as it intensifies focus on boosting profits from existing units.
The world's largest retailer is also seeking to trim capital spending that has grown 19 percent for the last decade, outstripping sales growth for the time period.
Speaking at the annual shareholders' meeting on Friday, chief financial officer Tom Schoewe said the company is cutting back to 190 to 200 new Supercenters from a previously planned 265 to 270. It will open about 170 in each of the three subsequent years.
President and chief executive officer H. Lee Scott reiterated that the mantra of EDLP, or everyday low prices, is the company's core strategy.
Wal-Mart has stumbled in recent years with a stagnant stock price, lagging apparel sales and other problems in an attempt to move upscale as the retailer sought a more stylish image to compete with Target and other rivals.
"Our customer knows Wal-Mart is the price leader and Wal-Mart will stay the price leader. Period," Scott said during a presentation at the Bud Walton Arena on the campus of the University of Arkansas here.
In the face disappointing same-store sales in the flagship U.S. division, which twice in the last 12 months have fallen below Wall Street expectations, Scott promised to do better: Improved store standards, clarity in the home department merchandise, more depth of assortment in apparel and scheduling of cashiers to coincide with times of heavy customer traffic.
Stores that have had the new scheduling procedure have reported comps sales gains that are "twice as strong" as stores without the scheduling system, he said. Long lines at checkout have been major customer complaint.
In addition, Wal-Mart said the company will repurchase as much as $15 billion of its stock in another effort to boost earnings per share.
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