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BENTONVILLE, Ark. -- Wal-Mart Stores, Inc. yesterday said it has adjusted its growth plans for the current fiscal year down yet again, including trimming its schedule of supercenter openings over the next three years.
Wal-Mart said at an analyst and investor meeting that it expects to open 195 supercenters in the U.S. this year, down 30 percent from the 281 it opened during last fiscal year. Projections for next fiscal year and the following year call for 170 and just 140 supercenters, respectively, including expansions and relocations.
Just this past June, Wal-Mart had said starting next fiscal year, it expected to open 170 supercenters annually over the next three years.
The scale-back of its supercenter ambitions comes as Wal-Mart vies for stronger returns, it told analysts and investors.
Wal-Mart Stores e.v.p. and c.f.o. Tom Schoewe said during the meeting that Wal-Mart expects overall sales to grow about 9 percent this year, slower than last year's 11.7 percent increase. What's more, Schoewe said Wal-Mart's sales will further slow, to between 5 and 8 percent growth over the next two years.
According to a report on CNN.com, Schoewe acknowledged during the meeting that these are "pretty trying times for [Wal-Mart] in an unusual macroeconomic environment."
Also during the meeting, Eduardo Castro-Wright, head of Wal-Mart's U.S. operations, said the retailer is looking to improve returns by building stores that are smaller. Speaking about merchandising opportunities, he said health & wellness (including pharmacy), groceries, and electronics show the most promise.
Wal-Mart projected total capital spending for the current fiscal year (fiscal 2008, ending January 2008) to be approximately $15 billion, lower than the $15.5 billion Wal-Mart forecast in June, and below the original projection of $17 billion. Capital expenditures in fiscal 2007 were $15.7 billion. Looking forward, total capital spending will flatten, the company said.
Wal-Mart noted that it will continue to accelerate its investment in the International operating segment during the next two fiscal years, anticipating that declines in capital spending at Wal-Mart Stores U.S. will be offset by increases at Wal-Mart International. The retailer projects worldwide spending of $14 to $15 billion in each of the next two years, with a focus on emerging markets.
Sam's Club will continue its expansion at a rate similar to fiscal year 2008, with approximately 25 new, expanded, or relocated U.S. facilities per year in fiscal year 2009 and fiscal year 2010, the company said. It plans to add two cross-dock facilities to its Sam's Club logistics network in fiscal year 2009. These distribution centers are expected to add approximately 100,000 square feet of distribution space to support its U.S. locations.
There are no plans to build distribution centers for Wal-Mart Stores U.S. during the next two years, the company said.