Wal-Mart feels the squeeze in US

Shoppers at a US Wal-Mart store Sales in Wal-Mart's US market have been sluggish

Related Stories

Wal-Mart, the world's largest retailer, has reported quarterly profits up 3.6%, although sales in its home US market fell for the fifth quarter in a row.

Wal-Mart's profits rose to $3.6bn (£2.3bn) helped by cost-cutting and growth in international markets.

But Wal-Mart sounded a note of caution, saying the slow economic recovery would "continue to affect" customers.

Meanwhile, UK supermarket chain Asda, which is owned by Wal-Mart, saw like-for-like quarterly sales drop 0.4%.

It is the second quarter in a row that Asda, which is the UK's second biggest supermarket group, has seen its sales drop.

It saw its first sales fall for four years, of 0.3%, in the first quarter of 2010.

Wal-Mart International president and chief executive Doug McMillon warned UK trading conditions were likely to remain tough.

"Asda's customers are facing recently announced tax increases and cuts in government spending. These are likely to cause our UK customers to face a challenging 12 to 18 months, " he said.

Start Quote

The slow economic recovery will continue to affect our customers”

End Quote Mike Duke Wal-Mart CEO
Customers squeezed

While international results have been strong, Wal-Mart's home market has lagged since the slowdown in the US economy.

International sales rose 11% and earnings jumped 17%, but in the US, sales at discount stores open for a year fell by 1.8%.

Wal-Mart benefited during the recession as affluent shoppers switched to using cheaper stores.

But it has already acknowledged that it is now losing some of those customers, who have started to trade back up.

Meanwhile, high US jobless figures and tight credit are still squeezing its main lower-income customers.

Fewer discounts

"The slow economic recovery will continue to affect our customers," said Mike Duke, Wal-Mart's chief executive.

"We expect they will remain cautious about spending."

Wal-Mart said it would focus on curbing expenses to help boost profits this year.

The retailer also said it would move away from its strategy of offering steep discounts on selected products in its US stores.

Wal-Mart said the discounts had not helped sales as much as expected.

Wal-Mart also raised its full-year earnings per share forecast to $3.95 to $4.05 a share from a previous forecast of $3.90 to $4. Analysts had forecast $3.99 per share.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

  • NS Savannah, 1962Nuclear dream

    The ship that totally failed to change the world


  • Irvine WelshScots missed

    Five famous Scots who can't vote in the Scottish referendum


  • Espresso cup7 days quiz

    Which city serves the strongest cup of coffee?


  • Glasgow 2014 quaichs and medalsQuaich guide

    What do the Scottish gifts given to Games medallists symbolise?


  • Malaysian plane wreckage in UkraineFlight risk

    How odd is it for three planes to crash in eight days?


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.